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© Faisal
Al Nasser / Reuters
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The crude exporting countries
of the Gulf Cooperation Council (GCC) are expected to lose US$275 billion in
revenue this year due to falling oil prices, according to the International
Monetary Fund (IMF) chief Christine Lagarde.
“At
the moment, a large share of fiscal and export revenues in the GCC come from
oil. With oil prices having declined sharply since mid-2014, export revenues
are expected to be nearly US$275 billion lower in 2015 than in 2014,” she said,
speaking at a meeting in Qatar with the finance ministers and central bank
governors of the GCC.
RT report continues:
"The
fiscal and current account balances in the region are deteriorating sharply,
with the fiscal balance projected by the IMF to be a deficit of 12.7 percent of
GDP in 2015,” she added.
The
GCC is comprised of Bahrain, Kuwait, Oman, Saudi Arabia, Qatar, and the United
Arab Emirates. With Gulf state economies largely dependent on oil exports;
global benchmark Brent has fallen in price from US$115 a barrel in June 2014 to
currently below US$50 per barrel.
“Growth
is also expected to slow, with IMF projection suggesting 3.2 percent in 2015
and 2.7 percent in 2016, compared to 3.4 percent in 2014,” Lagarde added.
The
Gulf states have managed to accumulate “financial buffers” that would help GCC
to avoid the need for a sudden or disruptive adjustment in fiscal policy, she
said. However, while oil prices are highly unlikely to rise in the coming
years, all GCC member states will have to change their fiscal policy.
The possible measures vary
from country to country, but they have one thing in common – austerity.
According to Lagarde, this includes “an expansion of non-oil tax revenues;
raising energy prices which are still well below international norms; firm
control of current spending, particularly on public sector wages; and a review
of capital expenditure.”
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