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Ten Consequences of Lower Commodity Prices for Resource-Rich Countries

  • Blog post

  • 6 February 2015

In a recent post on the Financial Times BeyondBRICs blog, NRGI authors Thomas Lassourd and David Manley describe 10 consequences of lower oil and metal prices for resource-rich countries. Read the whole post here. (Viewing the post is free, although registration is required.)

The consequences identified are:

  1. Budget deficits and increased borrowing
  2. Painful fiscal adjustments and the need for systems to manage them
  3. Lower exchange rates: higher inflation, and opportunity for non-oil exports
  4. Opportunity for fuel subsidy reform
  5. Higher carbon-based fuel consumption
  6. Lower capital investment, and delayed or canceled projects
  7. Lower rent generation and pressure for fiscal incentives to maintain investment
  8. Risks and opportunities for state-owned enterprises
  9. Important governance reforms could be under threat
  10. Rise in political competition that could worsen repression and conflict