IMF Warns: Oil Economies Won’t Break Even Anytime Soon

8 Nov 2016   IMF, Prices

A report from the IMF has warned that the “new normal” in oil will delay the economic recovery in oil-dependent countries. Few would be surprised by this, except perhaps policy-makers in some of these countries who still believe the solution to their problems is an increase in crude oil production, at a time when OPEC is desperately trying to get its members to agree to a freeze. The report, cited by Nigeria’s Guardian, notes that the factors contributing to the prolonged depression among those who depend on oil for their budgets include not just the persistent glut, but also the constant output from shale in the U.S., the notable decline in crude oil consumption in developed countries, and the strong greenback, in which international oil futures are priced. Also, demand for crude, although growing, is not growing fast enough to offset the combined effect of the […]

Why energy prices are ultimately headed lower; what the IMF missed

12 Oct 2016   Economy, IMF

We have been hearing a great deal about IMF concerns recently, after the release of its October 2016 World Economic Outlook and its Annual Meeting October 7-9. The concerns mentioned include the following: Too much growth in debt, with China particularly mentioned as a problem World economic growth seems to have slowed on a long-term basis Central bank intervention required to produce artificially low interest rates, to produce even this low growth Global international trade is no longer growing rapidly Economic stagnation could lead to protectionist calls These issues are very much related to issues that I have been writing about: It takes energy to make goods and services. It takes an increasing amount of energy consumption to create a growing amount of goods and services –in other words, growing GDP. This energy must be inexpensive, if it is to operate in the historical way: the economy produces good […]

IMF Cuts 2017 GDP Growth Outlook for Africa’s Largest Economies

5 Oct 2016   Africa, Economy, IMF

Low commodity prices, weak confidence drag down growth Nigeria’s economy forecast to contract 1.7% this year The International Monetary Fund has cut its 2017 economic growth forecasts for Africa’s two largest economies as low commodity prices, policy uncertainty and weak investor confidence weigh on output. Gross domestic product in South Africa will probably expand 0.8 percent next year, compared with the 1 percent forecast in July, the Washington-based lender said in its World Economic Outlook Report Tuesday. Nigeria’s economy will contract 1.7 percent this year and expand 0.6 percent in 2017, less than the 1.1 percent the IMF earlier forecast. The two nations make up more than half of the sub-Saharan Africa’s GDP. The fall in global commodity prices has hindered economic growth in the continent’s biggest producers of oil and minerals like platinum and gold, and led to a slump in foreign-currency earnings. In Nigeria, electricity shortages and […]

IMF expects $500B revenue loss for Mideast oil exporters

25 Apr 2016   IMF

Oil exporting countries in the Middle East lost a staggering $390 billion in revenue due to lower oil prices last year, and should brace for even deeper losses of more than $500 billion this year, the International Monetary Fund said Monday. The fund had projected in October that oil exporting countries in the region would see revenue losses of $360 billion in 2015, but oil prices took a tumble by year’s end and the drop in revenue amounted to $30 billion more. In a revised economic outlook report released Monday, the IMF said these countries will see revenues from oil exports drop even more in 2016, to between $490 billion to $540 billion compared to 2014, when oil prices were higher. Oil prices plunged to around $30 a barrel in January compared to $115 in mid-2014. IMF Director for Middle […]

Middle East Economies Facing Oil Revenue Falls, IMF Says

25 Apr 2016   IMF

The International Monetary Fund estimates the Middle East’s oil-dependent economies have missed out on $390 billion in oil revenues last year alone and face up to $150 billion in income losses this year as a result of cheap oil prices. The drop in revenues stemming from the export of oil is the direct result of the plunge in crude prices from around $115 a barrel in the middle of 2014 to below $30 at the start of the year and now above $40, the IMF said. The loss in potential revenues has put an enormous strain on the economies of major oil exporters such as Saudi Arabia and Kuwait who have posted massive budget deficits in the past year. The IMF had previously calculated that the declining energy prices would erase around $360 billion […]

IMF cuts Gulf states’ GDP growth forecast to 1.8%

25 Apr 2016   IMF

Economic growth in Gulf states is forecast to slow to 1.8 percent this year as the oil-dependent region cuts spending to battle fiscal deficits reaching 11.6 percent of gross domestic product.  The International Monetary Fund said tighter fiscal policy, weaker private sector confidence and lower liquidity in the banking system was speeding the sharp decline in the Gulf Cooperation Council’s economic growth from 3.3 percent in 2015. The IMF in October forecast growth of 2.75 percent this year.  “In the GCC, economic activity is projected to slow further,” according to an update to its regional economic outlook released on Monday. “Ambitious fiscal consolidation measures are being implemented this year, but budget balances will deteriorate nonetheless given the sharp drop in oil prices.”

The IMF, which said growth would recover to 2.3 per cent next year as fiscal deficits moderate to 10.8 per cent, warned that low oil prices and fiscal tightening would continue to weigh on these economies for the medium term. GCC non-oil growth, for example, is projected at 3.25 percent over the next five years, well below the 7.75 per cent recorded during 2006-2015.

View full article at

IMF Warns of Possible ‘Spiral’ of Waning Growth, Escalating Debt

14 Apr 2016   IMF

Play VideoPlayMuteCurrent Time 0:00/Duration Time 0:00Loaded: 0%Progress: 0%Stream TypeLIVERemaining Time -0:00Playback Rate1Chapters Chapters Subtitles subtitles off Captions captions settings captions off Fullscreen This is a modal window. No compatible source was found for this video. Foreground — — Background — — Window — — Font Size 50% Text Edge Style None Font Family Default Defaults Done Advertisement What Threats Are There to Global Financial Stability? Global policy makers need to guard against a self-reinforcing “spiral” of weakening growth and rising debt that could require a coordinated response by the world’s major economies, according to the IMF’s top fiscal watchdog. Most countries are on a higher debt path than they were a year ago, the International Monetary Fund said in its semi-annual Fiscal Monitor report released Wednesday. Fiscal deficits in 2015-2016 in emerging economies are projected to exceed levels during the global financial crisis, as countries struggle with low oil […]

IMF Cuts 2016 Global Economic Growth Outlook to 3.2%

13 Apr 2016   IMF

The world economy is increasingly at risk of stalling, the International Monetary Fund warned Tuesday as it once again cut its forecast for global growth prospects. The IMF said it was forced to downgrade its growth forecast for this year to 3.2%, down by 0.2 percentage point from its projection issued in January. China’s slowdown and weak commodity prices are taking a deeper toll on emerging markets than expected and rich countries are still struggling to escape the legacies of the financial crisis, the fund said. The downward revision is the fourth straight cut in a year, putting world economic growth just a hair over last year’s 3.1% and only marginally above the 3% rate the IMF has previously considered a technical recession globally. “Consecutive downgrades of future economic prospects carry the risk of […]