GCC Sovereigns Set Out Plans To Boost Their Balance Sheets

The finances of all six GCC countries have been hit by the slump in oil prices, forcing them to draw up new fiscal strategies involving debut international bond issues. With the future direction of the oil market remaining unclear, the key will be ensuring that economic diversification is front and center in all fiscal planning.

The deal struck by Opec countries on 30 November to cut oil output marked the first silver lining to the dark cloud of the slump in oil prices that has cast long shadows over the Gulf states’ economies since mid-2014.

The sharp contraction in state oil revenues – MEES calculations show that 2016 Opec oil export revenues were less than half 2014 levels and down 16.5% on 2015 – led cash-strapped governments to post record-high budget deficits as they grappled with a sudden reversal in fortunes.

The deal to cut 1.2mn b/d came into effect on 1 January this year with one key target - to boost the price of oil. It marks Opec’s first supply cut in eight years. (CONTINUED - 1813 WORDS)

DATA INSIDE THIS ARTICLE

table GCC 2016-17 International Bonds
chart Gcc Sovereigns* Face A Cumulative $560bn In Financing Needs Over 2015-19…
chart …Though Annual Requirements Are Set To Ease As Oil Prices Rise ($Mn)