The crude exporting countries of the Gulf Cooperation Council (GCC) are expected to lose $275 billion in revenue this year due to falling oil prices, according to the International Monetary Fund (IMF) chief Christine Lagarde,
Speaking at a meeting in Qatar with the finance ministers and central bank governors of the GCC she said the following:
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 $275 billion lower in 2015 than in 2014 (…)
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.
The GCC is comprised of:
- Saudi Arabia,
- and the United Arab Emirates.
The Gulf state economies are largely dependent on oil exports, therefore the price of oil is crucial to balance their budgets. Global benchmark Brent has fallen in price from $115 in June last year to currently below $50.
According to Lagarde:
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.