## Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought

_IMF Working Papers, June 13, 2018_

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## Bibliographic details
- Authors: Armand P Fouejieu, Sergio L. Rodriguez, Sohaib Shahid
- Published: June 13, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484361573.001

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### Summary findings
- The paper estimates fiscal multipliers for the Gulf Cooperation Council (GCC) countries.
- Results indicate that GCC fiscal multipliers have declined in recent years, which would make the on-going fiscal consolidation less costly than previously thought.
- Both capital and current multipliers have declined in recent years.
- Capital multipliers are larger than current multipliers, implying that reducing (less productive) current spending will help limit the adverse impact of such measures on growth.

### Methodology
- Estimation approach: OLS panel fixed effects.
- Sample: six countries.
- Sample period: 1990-2016.

### Policy implications and recommendations
- Fiscal consolidation in the GCC is likely to be less costly for growth than previously estimated, given the decline in fiscal multipliers.
- Prioritize reductions in current spending (characterized as less productive) over capital spending to limit adverse growth impacts, since capital multipliers remain larger than current multipliers.

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## Content in this bundle

- **Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought, WP/18/133, June 2018**
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_Source: https://www.imf.org/en/publications/wp/issues/2018/06/13/fiscal-adjustment-in-the-gulf-countries-less-costly-than-previously-thought-45931_