Impact of fuel subsidies on economic growth in energy-exporting countries: analysis with panel data

Samir Laissouf () and Kamel Lahouel
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Samir Laissouf: Faculty of Economics, Business Studies and Management, University of Abou Bekr Belkaid Tlemcen, Algeria
Kamel Lahouel: Faculty of Economics, Business Studies and Management, University of Abou Bekr Belkaid Tlemcen, Algeria

Economic and Regional Studies / Studia Ekonomiczne i Regionalne, 2025, vol. 18, issue 1, 36-46

Abstract: Subject and purpose of work This study aims to measure the impact of fuel subsidy on economic growth in 2010-2020. Materials and methodsThe panel model was used in the study to calculate the variables of fuel subsidies as a percentage of GDP and annual GDP growth per person for 11 energy producers and exporters. Resultsthe study showed that fuel subsidies had a significant adverse effect on economic growth, with a 1% increase in fuel subsidies leading to a 0.19% drop in growth in the sample nations. Conclusions The findings are consistent with previous studies results and support the view that the policy of fuel subsidies hurts economic growth channels. This study attempted to measure fuel subsidies using the price GAP approach, which allows for estimating the levels of internal energy prices and specific reference prices, such as international energy prices or the price of production cost recovery.

Keywords: economic growth; Panel data; fuel subsidy; energy-exporting countries (search for similar items in EconPapers)
JEL-codes: C23 H71 O47 Q40 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecoreg:v:18:y:2025:i:1:p:36-46:n:1004

DOI: 10.2478/ers-2025-0004

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