Weathering the Storm So Far: The Impact of the 2003–05 Oil Shock on Low-Income Countries
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Summary:
This paper examines the impact of the 2003-05 oil price increase on the balance of payments positions and IMF financing needs of low-income country oil importers. It finds that stronger exports reflecting favorable global conditions, a compression of oil import volumes due to the pass-through of world prices to domestic consumers, and a large increase in capital inflows helped low-income countries cope with the oil price shock. Preliminary data suggest that reductions in oil import volumes have not harmed growth. While fiscal balances generally improved, quasi-fiscal liabilities may be building. Lower demand for IMF assistance may reflect broader trends, but further oil price increases could put pressure on additional countries in 2006 and beyond.
Series:
Working Paper No. 2006/171
Subject:
English
Publication Date:
July 1, 2006
ISBN/ISSN:
9781451864311/1018-5941
Stock No:
WPIEA2006171
Pages:
33
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