Cairo-Mubasher: The Gulf countries move towards adopting a tight fiscal policy amid lower oil prices.
“The Gulf economies weathered the storm created by the fall in oil prices well so far, but 2016 is likely to be the year in which low energy prices begin to weigh on growth,” according to Middle East Economic Outlook issued by Capital Economics.
Hydrocarbon revenues account for 49% of the Gulf’s GDP, according to estimates released by the International Monetary Fund (IMF).
The Gulf governments are likely not to devalue their currencies, the report said, adding that GCC countries' currencies are pegged with the US dollar.
Capital Economics expected below-consensus GDP growth in the Gulf as a whole of just 1-2% over the next few years, which would be the weakest rates seen since last millennium.
