NEW YORK: The International Monetary Fund (IMF) has given an estimate that the countries of the Gulf Cooperation Council will face an export loss of around $300 billion as the oil prices are declining.
The combination of unexpectedly higher oil production from unconventional sources, weak global demand and the decision of OPEC to maintain their production levels resulted in a sharp oil price decrease, the Washington-based lender noted in its Regional Economic Outlook Update for Middle East and Central Asia Development.
Lower oil prices present economic challenges for oil exporters in the region, while benefits for oil importers remain contained.
The lender said all oil exporters in the GCC region, with the exception of Kuwait, will now have to dip into their accumulated savings or borrow to finance deficits in their government budgets for this year.
Nonetheless, many countries have significant buffers in the form of foreign assets that will allow them to avoid steep spending cuts and limit the drag on growth.
The GCC region is projected to log a fiscal deficit of 6.3 percent of GDP this year, a downward swing of about 11 percentage point of GDP. The current account surpluses are projected to fall this year to 1.6 percent of GDP in the GCC.
The 2015 growth outlook for MENAP oil exporters was lowered to 3 percent from 3.9 percent estimated in October. MENAP oil exporters comprise Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, the United Arab Emirates and Yemen.
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