Interview-IMF economic reform plans in the Gulf states are encouraging

Views 56 04/25/2016 - 19:35

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The IMF said that Saudi Arabia and other oil-exporting Gulf states are making encouraging efforts to repair the damage done to public finances due to the decline in oil revenues due to falling crude prices.

Said Masood Ahmed Director of the Middle East and Central Asia Department at the IMF said in an interview, "I see the steps in a number of countries to deal with the budget deficit. This is encouraging for us and gratifying."

His comments came hours after Saudi Arabia a comprehensive plan designed to cope with the era of cheap oil before and include spending cuts and tax increases and policies to expand the role of the private sector.

Ahmed said the Saudi plan, which was unveiled details yet looks "ambitious and comprehensive", adding that the size of the plan, "commensurate with the challenges facing the economy."

Six months before the fund warned that the budget being considered by most Middle Eastern countries is insufficient reforms are likely and that these countries may be forced to withdraw from their financial reserves.

The fund said in a report at the time, "with the exception of Kuwait, Qatar and the United Arab Emirates and in the light of the current policies will run out of reserves in countries within five years because of the large budget deficits."

In the latest report on the region, which was published on Monday, the fund did not repeat this warning, but said that states must make a greater effort to reduce the budget deficit and rebuild financial reserves and savings sufficient funds for future generations.

Ahmed said that the Gulf countries will continue to be forced to make tough decisions when implementing budget reform plans on a sustainable basis and seek to provide millions of jobs for their citizens who increased their number at the same time reducing dependence on oil economies.

It is expected to grow non-oil sector in the economies of the Gulf Cooperation Council (GCC) by about 3.25 percent Snuyat on average over the next five years, which is significantly lower than the growth rate recorded in the period between 2006 and 2015, which amounted to 7.75 percent.

Assuming the continuation of low oil prices for years to come, the total deficit in the budgets of the Gulf Cooperation Council (GCC) and Algeria would be about $ 900 billion between 2016 and 2021, according to the accounts of the Fund.

The IMF said "accumulate large debts to Algeria, Bahrain, Oman and Saudi Arabia during this period because of expected financing needs beyond what has financial reserves of liquid now."

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