Photo: robert via flickr
In analytical chapters of their World Economic Outlook, the International Monetary Fund is warning countries who export commodities to save their money, in order to protect against potential downturns in commodity prices.”Against the backdrop of near-record commodity prices, coupled with unusual uncertainty in the global outlook, the priority for commodity exporters is to upgrade their policy frameworks and institutions in addition to building fiscal buffers. However, if high price levels persist, a cautious approach is a sensible way forward.”
The IMF would rather see commodities exporters use the profits they are earning to reduce debt or be saved in case of a downturn.
“Commodity prices are still strong so this is an opportunity to use those strong prices to build up all those institutions and buffers needed in case the situation becomes worse.”
Fixing their debt situations and saving money could help prevent any serious crises that could occur in case of a downturn, and throughout the report the IMF makes it clear that this is their suggestion.
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