The International Monetary Fund released a statement saying they are happy with Saudi Arabia and other Gulf oil exporter’s actions taken in an effort to repair damage to their national finances as the recent drop in crude prices have significantly reduced their export revenues.
In an interview, Director of the IMF’s Middle East and central Asia department Masood Ahmed stated: ‘I do see in a number of countries addressing the budget deficit which gives us both encouragement and comfort.’
Supposing the price of crude oil stays as low as it has been in the next few years, the financial deficit of the Gulf Cooperation Council and Algeria will equal almost USD $900 billion from 2016 to 2020, fiscal experts have calculated.
Mr Ahmed’s speech came hours before the Saudi Arabian government was due to announce its scheme to ensure the gulf economy can make up what they are losing from oil, including government spending cuts, increasing taxes and strategies to expand the private sector.
With Bahrain and Saudi Arabia set to become significant debtors over this timeframe as their financial requirements are anticipated to exceed their current liquidity bumpers.