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Macro Trends

Lean Pickings: Developing Economies Feel The Burn

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  • Many developing economies are starting to buckle under the cumulative impacts of inflation, higher fuel and wheat costs and debt — all hitting as countries struggle to recover from the pandemic.

  • Overcoming this challenge will absorb donor resources, shape both oil demand and energy transition trajectories and generate political stresses.

  • For strategic countries like Egypt, help will probably be forthcoming — but it will come with strings attached.

Even if the world manages to avoid a general recession, many developing countries are in crisis. More so than in past downturns, predicting responses and impacts presents a challenge. There is no standard model, especially as regards energy impacts. In Lebanon, the collapse of the state has sparked a boom in solar take-up, despite the considerable upfront costs of installation. However, by and large, rising austerity has been bad for the clean energy transition.

Topics:
Macroeconomics , Low-Carbon Policy, Fiscal Terms, Policy and Regulation
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