The GCC budget deficits are forecast to "peak" at over $153bn this year against an estimated $119bn in 2015, after which it is likely to taper off but the "gap" is expected to persist over the medium term.
Saudi Arabia will cut ministers' salaries by 20% and scale back financial perks for public sector employees, according to a cabinet statement and royal decree broadcast on state-run Ekhbariya TV on Monday.
Gulf Arab oil exporters are expected to see their budget deficits peak this year owing to the plunge in energy revenues, a report said on Tuesday.
Fuel subsidy reform will help Qatar reduce its budget deficit by allowing spending to decrease, according to BMI Research, a Fitch Group company.
The International Monetary Fund backed Saudi Arabia’s sweeping economic reform plan and said the kingdom was cutting spending at the right speed to cope with a huge state budget deficit caused by low oil prices.
Qatar’s budget balance will “turn positive” as early as 2017, says a senior BMI researcher, who asserts that the country will face “only one year” of budget deficit.
The $23bn Riyadh Metro will be completed on schedule in 2019 and its budget is ring-fenced, a senior official said, quashing speculation the project could be scaled back or delayed following a slump in Saudi Arabia's oil revenues.
Authorities in Qatar will use fiscal policy and money market operations if needed to prevent low oil and gas prices from causing a liquidity crunch in the banking system, QCB governor was quoted as saying.
British finance minister George Osborne has warned the economy faces a "dangerous cocktail of new threats" in 2016, insisting on the need to remain strict on public spending.
Saudi Arabia has raised domestic energy prices, including fuel prices, state news agency SPA said on its Twitter account on Monday.
