KATADATA - The International Monetary Fund (IMF) projected that the economic conditions of petrodollar nations are entering a grim period this year due to the plunging oil prices. Significant revenue loss from the oil export has disordered governments in managing their fiscals and budgets. It even contributes into an economic crisis.
There are deficits in the state budgets of the petrodollar nations due to the slump of oil prices below the fiscal breakeven price (FBP). A number of infamous policies are forced to be taken, starting from taking away subsidies, government bonds issuance to pay the overseas debts, and to retain the civil servants’ salaries.
The slump has occurred since June 2014. The oil prices have plunged so deep from US$ 115 per barrel to the current US$ 30 per barrel, 74 percent slump just in one and a half year. The Saudi Arabian oil that is shipped into Asian regions has even touched US$ 26 per barrel.