Abstract:

High degree of economy monetization is typical for countries with developed economies but the case is ambiguous for emerging countries oriented to export of commodities. The authors have researched different clusters of countries with economies highly dependent on the export of raw materials, with the purpose of studying the influence of key monetary indicators for GDP growth.
The results have shown that in all clusters of countries studied, there is an inverse relationship between the economy’s monetization indicator and the growth of GDP steps in the case of stabilization or falling oil prices. During this period, the monetization growth of the economy may be accompanied by a GDP decline. A rise in the degree of economy monetization might have a positive impact on the GDP of commodities developed countries with raw material based or commodities based economies only with an upward trend in oil prices.
The key factors contributing to the required degree of monetization in raw material producing countries are lending growth and the exchange rate regime. Inflation targeting in oil producing countries limits the possibilities for direct investment, as it greatly increases the interest rate risk for long-term projects. Attaining a balance between saving and investing is important, given the fact that credit expansion not supported by the growth in domestic saving involves aggravation of dependency on oil market trends. The adjustment of saving and lending growth rates weakens the correlation of fluctuations in GDP with oil prices.