Monetary Fund cut its estimate for the deficit of the budgets of the GCC


 

20-10-2016 07:17 PM

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International Monetary Fund cut yesterday its previous forecast for the level of the budgets of the GCC deficit over the next six years, a trillion dollars to 765 billion, having taken austerity measures is unprecedented, including thereduction of benefits and rewards for government employees, and to reduce energy subsidies and the imposition of new taxes, in order to cope with the prices declining oil.
The Director of the IMF in the Middle East Masood Ahmed, that « the drop in oil prices led to a significant decline in exports to the oil – exporting countries in theregion , revenues, and is expected to reach nearly $ 435 billion during thecurrent year». He pointed out that «some oil – producing countries in the region have resorted to the use of a large part of its reserves to finance their budget deficits, especially Saudi Arabia and Algeria, while others resorted to withdraw assets from sovereign funds.» He advised Ahmed «countries in the region toissue sovereign bonds in international markets, to aid in the promotion offinancial flows». He predicted «lower average growth of the economies of theGulf countries to 1.75 percent during the current year , compared with 3.75 percent last year, with a tightening of the fiscal policy and declining liquidity inthe financial sector», but he guessed that «growth rising to 3 percent next year, with low frequency fiscal austerity. »
Fund predicted that the imposition of taxes in the region and the partial improvement in oil prices, the rise in non – oil growth in the Gulf countries to 5.3 percent, which is much lower than the average period between 2000 and 2014 amounting to seven percent. Despite the improvement in oil prices compared tolast year, Ahmed guessed that «ranges barrel price between $ 50 and $ 60 over the next five years», so advised «Gulf States to accelerate the implementation of structural to diversify their economies reforms, and strengthening the role of the private sector and create jobs quickly.» He said: «expected to enter more than 2.2 million Arabs of the labor market by 2020, amillion citizens of them will find work».
Ahmed stressed that « the fall in oil prices and the continuation of the ongoing conflicts in the Arab region have caused loss of confidence and put the region in the absence of certainty, despite the benefit oil – importing countries of the lower prices, although the decline in remittances from its citizens working in oil -producing countries, is part of this impact , it is expected that the oil – importing countries achieved growth rates of up to 3.6 percent during the current year, to rise to 4.2 percent next year. »
Ahmed stressed that the «workers in the oil – exporting countries remittances to the Levant fell 15 percent during the current year, due to falling oil prices, which impacted negatively on the region , which was forced to lay off workers, especially in the oil petrochemical sectors, banks economies».
The fund added that « the fall in oil prices and ongoing conflicts pose a burden onthe prospects for the economy in the Middle East and North Africa, Afghanistan and Pakistan region», adding that «uncertainties arising from the conflicts in Iraq, Libya, Syria and Yemen, have caused a lack of confidence, while the impactof lower oil prices in exports and economic activity in the oil – exporting countries. »

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