The GCC states have begun to implement austerity measures, including reduction of expenditure and increase of non-oil revenues, to cope with the losses from low oil prices.
These measures come in light of economic analysts’ expectations that the six Gulf states will post a combined record budgetary deficit of $180 billion in 2015, reports UAE-based Aliqtisadi.
Analysts point out that the GCC members, which are the leading oil exporters in the world, have not yet reached the desired level of austerity, given the fact that oil revenues are expected to be low for several years.
Christine Lagarde, chief of the International Monetary Fund (IMF), during a meeting with GCC finance ministers in Qatar this month predicted that “global energy prices could remain low for years” and urged them to take action to resolve the issue.
According to IMF’s statistics, the surplus budgets of the UAE, Qatar, Kuwait, Bahrain and Oman declined from $182bn in 2013 to $24bn in 2014.
Saudi Arabia, Bahrain and Oman registered deficits in their 2014 budgets for the first time since the global financial crisis in 2009.
(US$1 = AED3.67, at the time of publishing)