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.