BSS, Dhaka :
The developing countries should rebuild fiscal buffer to support economic activities in case of a growth slowdown by taking the advantage of declining oil price, a latest report of the World Bank (WB) said.
Released Wednesday in Washington DC, the latest edition of the Global Economic Prospects of the multi-donor agency said lower oil prices offer many countries a chance to improve fiscal positions more quickly than might have been possible before mid-2014.
It said many developing countries have less fiscal space now than they had prior to 2008, having used fiscal stimulus during the global financial crisis. And in recent years, private debt levels have risen substantially in some developing countries.
“With oil likely to remain cheap for some time, oil-importing countries should lower or even eliminate fuel subsidies and rebuild the fiscal space needed to carry out future stimulus efforts, said Kaushik Basu, Senior Vice President and Chief Economist at the World Bank on releasing the report.
He said the rebuilding of fiscal buffers would provide the room required to support activity during times of economic stress.
The report said soft oil prices are expected to persist in 2015 and would be accompanied by significant real income shifts from oil-exporting to oil-importing countries. For many oil-importing countries, lower prices contribute to growth and reduce inflationary, external, and fiscal pressures.
The developing countries should rebuild fiscal buffer to support economic activities in case of a growth slowdown by taking the advantage of declining oil price, a latest report of the World Bank (WB) said.
Released Wednesday in Washington DC, the latest edition of the Global Economic Prospects of the multi-donor agency said lower oil prices offer many countries a chance to improve fiscal positions more quickly than might have been possible before mid-2014.
It said many developing countries have less fiscal space now than they had prior to 2008, having used fiscal stimulus during the global financial crisis. And in recent years, private debt levels have risen substantially in some developing countries.
“With oil likely to remain cheap for some time, oil-importing countries should lower or even eliminate fuel subsidies and rebuild the fiscal space needed to carry out future stimulus efforts, said Kaushik Basu, Senior Vice President and Chief Economist at the World Bank on releasing the report.
He said the rebuilding of fiscal buffers would provide the room required to support activity during times of economic stress.
The report said soft oil prices are expected to persist in 2015 and would be accompanied by significant real income shifts from oil-exporting to oil-importing countries. For many oil-importing countries, lower prices contribute to growth and reduce inflationary, external, and fiscal pressures.
