Impact of Oil Price Shocks on Sudan s Government Budget

Elsiddig Rahma, Noel Perera and Kian Tan
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Elsiddig Rahma: Faculty of Engineering and Environment, Northumbria University, NE1 8NT, Newcastle Upon Tyne, Tyne and Wear, England
Noel Perera: Faculty of Engineering and Environment, Northumbria University, NE1 8NT, Newcastle Upon Tyne, Tyne and Wear, England
Kian Tan: Faculty of Engineering and Environment, Northumbria University, NE1 8NT, Newcastle Upon Tyne, Tyne and Wear, England

International Journal of Energy Economics and Policy, 2016, vol. 6, issue 2, 243-248

Abstract: There is well established literature on the negative relationship between oil price shocks and aggregate macroeconomic activities for developed economies. However, there is a paucity of similar empirical studies in developing countries. In this respect, Sudan is a prominent example. This paper attempts to address this gap by employing the vector auto-regression model to explore the impact of oil price shocks on the main variables of the Sudan s government budget using quarterly data for the period 2000:q1-2011:q2. The empirical results suggest that oil price decreases significantly influences oil revenues, current expenditure and budget deficit. However, oil price increases do not Granger cause budget variables. Results from the impulse response functions and forecast error variance decomposition analysis suggest that oil price shocks have asymmetric effect on government budget

Keywords: Vector Auto-regression Model; Oil Price Shocks; Sudan (search for similar items in EconPapers)
JEL-codes: C32 O55 Q43 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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