Crunch Time For GCC Fiscal Reforms

With oil prices touching an 11-year low on 22 December, oil producing countries need to balance their budgets while maintaining social spending in order to keep their societies insulated from political and social unrest. If the political system in key Gulf states has survived for the past half century because of government largesse, then withdrawing benefits could threaten to unravel the status quo.

GCC states are all potentially vulnerable if they are unable to maintain their usual level of social spending. Since oil prices began to slide in 2H14, GCC states and other oil producers have looked to mitigate the impact of reduced revenues.


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