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Oil shock hurt­ing ex­porters: La­garde

Oil ex­porters have not fully re­cov­ered from the dra­matic oil price shock of 2014, the head of the In­ter­na­tional Mone­tary Fund said on Satur­day, and she cau­tioned against spend­ing money on “white ele­phant projects.” “With rev­enues down, fis­cal deficits are only slowly de­clin­ing, de­spite sig­nif­i­cant re­forms on both the spend­ing and rev­enue sides, in­clud­ing the in­tro­duc­tion of VAT and ex­cise taxes,” Chris­tine La­garde, the man­ag­ing di­rec­tor of the IMF, told a con­fer­ence in Dubai. “This has led to a sharp in­crease in pub­lic debt, from 13% of GDP in 2013 to 33% in 2018.” La­garde said the un­cer­tainty in the growth out­look for oil ex­porters also re­flected moves by coun­tries to shift rapidly to­ward re­new­able en­ergy over the new few decades, in line with the Paris cli­mate change pact.

‘Stocks may not gain much in 2019’

In­vestors hop­ing for big re­turns from fi­nan­cial mar­kets this year are go­ing to have to dial back their ex­pec­ta­tions, ac­cord­ing to the chief global eq­uity strategist at Gold­man Sachs. A stock mar­ket re­bound at the be­gin­ning of 2019 comes af­ter a pe­riod of gloomy mar­ket sen­ti­ment in the fi­nal three months of last year. Us-china trade ten­sions, Brexit un­cer­tainty and fears about global growth in­ten­si­fied at the end of 2018, prompt­ing US stocks to reg­is­ter their worst De­cem­ber since the Great De­pres­sion. How­ever, im­prov­ing mar­ket sen­ti­ment since the be­gin­ning of 2019 has helped the Dow Jones In­dus­trial Av­er­age jump more than 7%. At the start of the year, econ­o­mists at Gold­man Sachs ar­gued fi­nan­cial mar­kets had over­priced the risk of a global re­ces­sion.

Chris­tine La­garde

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