International oil exporter Christine Lagarde said on Saturday that oil exporters had not fully recovered from the oil price shock of 2014 and warned against spending money on "huge and hollow projects".
"Due to declining revenues, the fiscal deficit is only slowly falling, despite important reforms on both the spending and income sides, including the introduction of VAT and production taxes," Lagarde told a conference in Dubai.
"This led to a significant increase in public debt from 13 percent of GDP in 2013 to 33 percent in 2018." "The uncertainty surrounding the growth prospects of all oil-exporting countries also reflected the movement of countries to rapidly transition to renewable energy in the next few decades, in line with the Paris agreement on climate change," she said.
There is scope for improving financial frameworks in the Middle East, with some weaknesses arising from "focus on short-term projects and insufficient credibility," she said.
Lagarde pointed out that governments in the region may be tempted to give preference to mega projects instead of investing in people and production potential.
Saudi Arabia, the Middle East's largest economy, has announced plans to move forward with three mega-projects, including the city of Newum, announced by Crown Prince Mohammed bin Salman with investments of $ 500 billion.
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"Due to declining revenues, the fiscal deficit is only slowly falling, despite important reforms on both the spending and income sides, including the introduction of VAT and production taxes," Lagarde told a conference in Dubai.
"This led to a significant increase in public debt from 13 percent of GDP in 2013 to 33 percent in 2018." "The uncertainty surrounding the growth prospects of all oil-exporting countries also reflected the movement of countries to rapidly transition to renewable energy in the next few decades, in line with the Paris agreement on climate change," she said.
There is scope for improving financial frameworks in the Middle East, with some weaknesses arising from "focus on short-term projects and insufficient credibility," she said.
Lagarde pointed out that governments in the region may be tempted to give preference to mega projects instead of investing in people and production potential.
Saudi Arabia, the Middle East's largest economy, has announced plans to move forward with three mega-projects, including the city of Newum, announced by Crown Prince Mohammed bin Salman with investments of $ 500 billion.
alforatnews.com/modules/news/article.php?storytopic=37&storyid=187774