World Bank urges states to fix finances as oil prices stay low
The World Bank has warned developing countries to build up crisis buffers while oil prices are low.
The organisation said the developing nations were “faced with weaker export prospects, an impending rise in global interest rates and fragile financial market sentiment”.
The use of fiscal stimulus as a response to the financial crisis means many developing countries have less fiscal space now than they did prior to 2008.
“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, the chief economist at the World Bank.
Low oil prices are set to be a recurrent theme for developing countries in 2015.