Iran budget signals caution over sanctions relief

2015 ◽  
Keyword(s):  
Government Spending ◽  
Political System ◽  
Oil Prices ◽  
External Pressure ◽  
Fiscal Year ◽  
Content Type ◽  
Spending Patterns ◽  
International Dispute ◽  
The Government ◽  
Oil Revenues

Subject Iranian budget. Significance The government negotiated the 2015-16 budget, which will come into effect at the start of the fiscal year on March 21, against the backdrop of two major uncertainties -- the outlook for global oil prices and talks to resolve the international dispute over Iran's nuclear programme. As legislated, the budget reins in spending and assumes the continuation of the sanctions regime and significantly lower oil revenues. However, there are serious questions over whether the budget's projections, including higher revenues from taxation and privatisation, and lower spending on cash grants, will be met. Impacts Even with a nuclear agreement, the government's budget balancing act this year will be a challenging one. Parliament's smooth passing of the budget shows that Iran's political system can operate on consensus even under external pressure. Removal of sanctions and increased oil revenues could lead to a return of undisciplined government spending patterns.

Ecuador unlikely to scrap dollarisation

2015 ◽  
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Oil Prices ◽  
The State ◽  
Content Type ◽  
Severe Strain ◽  
The Future ◽  
The Government ◽  
The Right ◽  
Oil Revenues

Subject The future of dollarisation in a context of low oil prices. Significance Oil revenues have underpinned the popularity of President Rafael Correa's government by enabling spending on welfare, infrastructure and development that has boosted economic growth. The collapse of world oil prices has placed the dollar-denominated economy under severe strain and raised doubts about the future of dollarisation in Ecuador. Impacts The fiscal challenges the government is facing will provide the opposition with an opportunity to strengthen in 2015. The right will play on concerns over the management of the economy, the scale of public debt and the size of the state. The left will attack the government for failing to reduce Ecuador's reliance on oil and undertake wider and deeper reforms.

Rising oil prices will bolster Ecuador’s Moreno

2018 ◽  
Keyword(s):  
Oil Prices ◽  
Political Crisis ◽  
Environmental Discourse ◽  
Content Type ◽  
Yasuni National Park ◽  
Fiscal Conditions ◽  
Oil Sector ◽  
International Investors ◽  
The Government ◽  
Oil Revenues

Significance Higher oil prices have eased pressures on Ecuador’s trade balance and public finances, helping President Lenin Moreno as he attempts to ameliorate the political crisis that has gripped his government since his inauguration in May. However, the oil sector faces challenges including tight fiscal conditions, production cuts and widespread corruption. Impacts Higher oil prices will reassure international investors that the government will be able to honour its rising debt obligations. Moreno is likely to secure referendum backing for his plans to increase the protection of the Yasuni National Park. Moreno will find it difficult to reconcile his environmental discourse with his need to bring in fresh oil revenues over the longer term.

Ghana's budget proposals likely to prove unfeasible

2017 ◽  
Keyword(s):  
Government Spending ◽  
Foreign Debt ◽  
Fiscal Deficit ◽  
Content Type ◽  
Small Impact ◽  
The Government ◽  
Oil Revenues ◽  
Expected Increase ◽  
Double Digit

Significance The government plans to increase government spending to 58.1 billion cedis (12.5 billion dollars), up 13.7% from 2016, while reducing the fiscal deficit to 6.5% of GDP from 8.7% last year. The government has assured supporters it will keep campaign promises to cut taxes and increase infrastructure spending, despite the larger-than-expected fiscal hole in government accounts. Impacts Increased oil revenues will have a relatively small impact on government finances, despite the almost 40% expected increase in output. The government will likely renege on several election promises after admitting that it cannot deliver double-digit growth this year. Plans to pay down foreign debt this year may be unachievable given overly ambitious revenue targets.

Oil price drop piles more pressure on Iran's economy

2015 ◽  
Keyword(s):  
Oil Price ◽  
Fiscal Year ◽  
Subsequent Reduction ◽  
Political Will ◽  
Content Type ◽  
Parliamentary Elections ◽  
Efficient Management ◽  
The Government ◽  
Oil Revenues ◽  
Spending Cuts

Significance Iranian officials appear to have been caught off guard by the collapse in oil prices. The draft budget for the fiscal year 2015-16 (March-March) was presented to the legislature last December based on an estimated oil price of 70 dollars per barrel. It is now being hastily revised based on 40 dollars per barrel. The subsequent reduction in forecast revenues makes significant spending cuts and revenue raising necessary. However, with a nuclear agreement yet to be sealed and parliamentary elections on the horizon in 2016, questions remain over whether the government will have the political will to carry out such measures. Impacts The fall in oil revenues will reduce the Central Bank's ability to counteract further falls in the exchange rate. Inflation is likely to rise, reducing the government's spending power further. Rouhani's credibilty rests on efficient management of the economy and his ability to engineer a recovery. With elections due in 2016, proposed spending cuts are likely to face stiff resistance in parliament that will slow the budget's passage.

South Sudan oil sector expansion will prove elusive

2017 ◽  
Keyword(s):  
Oil Prices ◽  
Income Source ◽  
Content Type ◽  
Technical Issues ◽  
Oil Sector ◽  
The Government ◽  
Oil Revenues ◽  
Budget Shortfalls ◽  
Domestic Fuel ◽  
Budget Revenue

Significance Since independence in 2011 -- and during the preceding six years of autonomy -- the budget has depended overwhelmingly on oil revenues. However, production has contracted significantly since the outbreak of conflict in 2013, and revenues have suffered further from declining global oil prices. With savings and credit almost entirely depleted, the government needs new revenue to fund budget shortfalls, and is looking to the only reliable income source it has known. Impacts Logistics, equipment and technical issues will further complicate efforts to boost production. Plans to build a domestic refinery could ease domestic fuel shortages, but may face delays. Budget revenue targets will be missed, putting pressure on expenditure requirements.

Japan GDP growth will rely on exports and wage rises

2017 ◽  
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Labour Force ◽  
Oil Prices ◽  
Household Consumption ◽  
Sales Tax ◽  
Gdp Growth ◽  
Content Type ◽  
The Government ◽  
Will Force

Significance Foreign trade accounted for almost the entire increase, more than making up for declines in household consumption and government spending. Impacts The government will claim credit for growth, but voters will see this as theoretical unless incomes rise faster. Strong GDP growth will make it hard to argue against raising the sales tax as scheduled in 2019. Economic growth and a shrinking labour force will force employers to raise compensation eventually. Japan is vulnerable externally if oil prices rise further or the Fed hikes rates too fast.

Hong Kong’s institutional incongruities and its tourism policy

2015 ◽  
Vol 4 (3) ◽  
pp. 312-329 ◽  
Author(s):  
Chiew Ping Yew
Keyword(s):  
Hong Kong ◽  
Political System ◽  
Central Government ◽  
Institutional Arrangements ◽  
Content Type ◽  
Business Interests ◽  
Tourism Policy ◽  
The Government ◽  
The Individual ◽  
Policy And Planning

Purpose – With a focus on Hong Kong tourism policy, the purpose of this paper is to explain the Hong Kong government’s conundrum in addressing society’s concerns and controversies over the massive influx of mainland tourists in recent years. Design/methodology/approach – This paper adopts the approach of historical institutionalism, in which the notion of structural-power takes centre stage. It outlines some notable trends in Hong Kong’s tourist arrivals and highlights some of the controversies that have arisen before delving into how existing institutional arrangements and key actors have shaped Hong Kong’s tourism policy amid the city’s shifting social, political and economic contexts. Findings – The prevalence of business interests and the ideology of economism largely explain the Hong Kong government’s stasis in tackling the problems stemming from the large inflow of mainland visitors. Institutional arrangements in the post-handover period have further empowered the business class, giving it an edge over the unelected executive that lacks a popular mandate. Therefore, even if the central government has signaled its willingness to adjust the Individual Visit Scheme (IVS) policy, the Hong Kong government is unlikely to propose significant cuts to the inflow of IVS arrivals. Without further political reforms to boost the executive’s legitimacy and accountability to the Hong Kong people, it is doubtful that the government may emerge from its predicament in the near future. Originality/value – Through the lens of tourism policy and planning pertaining to inbound mainland visitors, this paper aims to assess the current state of governance in Hong Kong. It not only offers a timely look into Hong Kong’s political system 17 years after handover but also explores the extent to which apparent dysfunctions in the city’s governance today are a consequence of institutional incongruities in its political system.

France’s Macron seeks to relaunch economic reforms

2021 ◽  
Keyword(s):  
Government Spending ◽  
Social Care ◽  
Youth Unemployment ◽  
Economic Reforms ◽  
Fiscal Rules ◽  
Left Wing ◽  
Social Unrest ◽  
Content Type ◽  
The Government ◽  
Mandatory Vaccination

Significance Among those policies are measures targeted at youth unemployment and social care for older people, aimed at attracting left-wing support. Most importantly, Macron has committed to relaunching his controversial pension reforms, which triggered widespread social unrest in late 2019 and early 2020. Impacts Mandatory vaccination could trigger protests and legal action against the government. The centre-right Republicans could take support from Macron if they unite around a strong presidential candidate over the coming months. Macron will likely push for looser EU fiscal rules to facilitate more government spending beyond 2022.

Wagner’s law and governments’ functions: granularity matters

2019 ◽  
Vol 46 (2) ◽  
pp. 446-466 ◽  
Author(s):  
Joao Jalles
Keyword(s):  
Panel Data ◽  
Government Spending ◽  
Functional Form ◽  
Emerging Market ◽  
Content Type ◽  
Wagner’S Law ◽  
Potential Gdp ◽  
Wagner's Law ◽  
The Law ◽  
The Government

Purpose The purpose of this paper is to assess the responses of different categories of government spending to changes in economic activity. In other words, the authors empirically revisit the validation of the Wagner’s law in a sample of 61 advanced and emerging market economies between 1995 and 2015. Design/methodology/approach The authors do so via panel data instrumental variables and time-series SUR approaches. Findings Evidence from panel data analyses show that the Wagner’s law seems more prevalent in advanced economies and when countries are growing above potential. However, such result depends on the government spending category under scrutiny and the functional form used. Country-specific analysis revealed relatively more cases satisfying Wagner’s proposition within the emerging markets sample. The authors also found evidence of counter-cyclicality in several spending items. All in all, the Wagner’s regularity seems more the exception than the norm. Originality/value While in the literature on the size of the public sector with respect to a country’s level of economic development has received much attention, the authors make several novel contributions: since some economists criticized Wagner’s law because of ambiguity of the measurement of government expenditure (Musgrave, 1969), instead of looking at aggregate public expenditures, the authors go much more granular into the different functions of government (to this end, the authors use the Classification of Functions of the Government nomenclature). The authors check the validity of the Law via an instrumental variable approach in a panel setting; after that, the authors take into account the phase of the business cycle using a new filtering technique to compute potential GDP (output gap); then, the authors cross-check the baseline results by considering alternative functional form specifications of the Law; and finally, the authors look at individual countries one at the time via SUR analysis.

Government expenditure and economic growth in the European Union countries

2018 ◽  
Vol 45 (2) ◽  
pp. 372-386 ◽  
Author(s):  
Gitana Dudzevičiūtė ◽  
Agnė Šimelytė ◽  
Aušra Liučvaitienė
Keyword(s):  
Economic Growth ◽  
European Union ◽  
Government Spending ◽  
Government Expenditure ◽  
The European Union ◽  
Policy Makers ◽  
Content Type ◽  
Eu Countries ◽  
The Government ◽  
The Relationship

Purpose The purpose of this paper is to provide more reliable estimates of the relationship between government spending and economic growth in the European Union (EU) during the period of 1995-2015. Design/methodology/approach The methodology consisted of several different stages. In the first stage for an assessment of dynamics of government spending and economic growth indicators over two decades, descriptive statistics analysis was employed. Correlation analysis helped to identify the relationships between government expenditures (GEs) and economic growth. In the third stage, for modeling the relationship and the estimation of causality between GE and economic growth, Granger causality testing was applied. Findings The research indicated that eight EU countries have a significant relationship between government spending and economic growth. Research limitations/implications This study has been bounded by general GE and economic growth only. The breakdowns of general GE on the basis of the activities they support have not been considered in this paper, which is the main limitation of the research. Despite the limitation, it might be maintained that the research highlights key relationships in the EU countries. Originality/value These insights might be useful for policy makers. In countries with unidirectional causality running from GE to economic growth, the government can employ expenditure as a factor for growth. The governments should ensure that resources are properly managed and efficiently allocated to accelerate economic growth in the countries with unidirectional causality from GDP to GE.

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