The UAE may cut government spending due to plunging oil prices, according to the UAE Central Bank’s governor, Mubarak Rashed Al Mansoori.
Al Mansoori adds that, according to Bloomberg, the fall in government revenues from oil may lead to further fiscal consolidation, albeit at a gradual pace, to keep the spending priorities in support of non-oil growth, Kuwait-based Al-Qabas reports.
He explains that the global economic slowdown may curb the UAE’s growth of non-oil GDP, which would require taking precautionary measures to reduce this effect.
The Central Bank governor says that the UAE government is seeking to increase institutional support for lending to small and medium-sized companies, and is moving forward in the preparation of bankruptcy law, where non-performing loans fell to 6.3 per cent of total loans in September.
It is worth mentioning that oil prices fell more than 40 per cent in 2014, which put pressure on the economies of the GCC states since oil is their main source of income.