GCC fiscal reform progress will remain slow: Moody’s
Wednesday, 08 14 2019, Category: Economy, Country: Gulf Cooperation Council
Although policy measures have slowed fiscal deterioration linked to lower oil prices in the GCC, most sovereigns will continue to run fiscal deficits and accumulate debt if prices remain moderate as expected, Moody's Investors Service said.
At the current moderate oil price levels, Moody's expects that the GCC governments will increase spending and delay unpopular austerity measures to preserve high living standards and social stability, implying that fiscal breakevens are unlikely to decline significantly in the near- to medium-term.
"Lower oil prices since 2014 have significantly weakened GCC sovereigns' public finances," said Alexander Perjessy, a Moody's vice president – Senior Analyst and the report's co-author. "The implementation of fiscal consolidation measures and reforms has been uneven across the six GCC sovereigns and has so far been more concentrated on the expenditure side.