Republic of Equatorial Guinea: Selected Issues

International Monetary Fund

No 2009/099, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper discusses fiscal sustainability and capital expenditures for Equatorial Guinea. The paper formulates a permanent income hypothesis model and estimates it using data on oil revenues from Equatorial Guinea. The first methodology is based on a standard permanent income model, using a 50-year time horizon and real rate of return of 2 percent. The paper then extends the model to incorporate a feedback effect from capital spending to non-oil GDP growth, and shows its implications for fiscal sustainability.

Keywords: ISCR; CR; REER; current account; oil GDP; oil revenue; current account norm; spending boom; petroleum revenue projection; production function; Capital spending; Real effective exchange rates; Personal income (search for similar items in EconPapers)
Pages: 34
Date: 2009-03-25
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