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IMF sees weaker growth for GCC in 2015 amid lower oil prices

by ChemOrbis Editorial Team -
  • 22/10/2015 (12:12)
According to media reports, the International Monetary Fund (IMF) has reported that they expect to see modest growth in Gulf Cooperation Council (GCC) countries in 2015. According to the IMF, GCC economies will grow 3.3% this year, slower than the growth rate of 3.4% posted in 2014. The IMF predicted that the GCC will expand at a slower rate of 2.8% in 2016 as the region has lost around $360 billion in revenues so far due to the slump in oil prices.

The IMF also urged GCC countries to take some fiscal measures in order to support their economies as the decrease in oil prices is not likely to reverse direction in the short term. The IMF stressed that Saudi Arabia, Bahrain and Oman may exhaust the reserves needed to support current spending within five years because of widening fiscal deficits while adding that Kuwait, Qatar and the United Arab Emirates can sustain their current levels of spending over a longer period.

Saudi Arabia is planning to cut spending to lower its budget deficit and the government is also considering delaying some projects and selling bonds for the first time since 2007. The IMF expects Saudi Arabia’s budget deficit to rise to more than 20% of gross domestic product (GDP) this year and to 19.4% in 2016. For Oman and Bahrain, meanwhile, the IMF expects their budget deficits to widen to 17.7% and 14.2%, respectively.
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