Page 16 - Policy Economic Report - October 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Fiscal adjustment plays a crucial role in containing debt risks. With inflation moderating and central banks
lowering policy rates, economies are better positioned now to absorb the economic effects of fiscal
tightening. Delaying would be both costly and risky, as the required correction grows as time goes by; and
experience shows that high debt and lack of credible fiscal plans can trigger adverse market reaction.

According to IMF, a cumulative tightening of about 3.8 percent of GDP over the same period would be
needed for an average economy to ensure a high likelihood of debt stabilization. In countries where debt
is not projected to stabilize, such as China and the United States, the required effort is substantially
greater.

Therefore, growth-focused fiscal measures are needed which will vary across countries. Advanced
economies should advance entitlement reforms, reprioritize expenditures, and increase revenues where
taxation is low. Emerging market and developing economies have greater potential to mobilize tax
revenues—by broadening tax bases and enhancing revenue administration capacity—while strengthening
social safety nets and safeguarding public investment to support long-term growth.

5. BRICS nations hit clean energy milestone: Fossil fuels to drop under 50% by end of 2024 for
first time

The BRICS nations are poised to see fossil fuel capacity drop below half of their installed power capacity
by the end of 2024 in a major shift towards cleaner energy, according to a new report by Global Energy
Monitor (GEM).

The BRICS group — originally formed by Brazil, Russia, India, China, and South Africa and recently
expanded to include Iran, the United Arab Emirates, Ethiopia, and Egypt — is home to half of the world’s
population and responsible for a third of global gross domestic product (GDP) and carbon dioxide
emissions. Despite their historical reliance on fossil fuels, particularly coal, the new data reflects a rapid
pivot towards renewable energy across these nations.

Figure 11: Fossil fuels to lose majority share of total power to cleaner sources in BRICS countries by end
of 2024

Source- Global Energy Monitor, IRENA Page | 15

October 2024