Gulf Cooperation Council States to lose $240 billion because of low oil prices

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The gulf countries will face loss of $240 billion in 2015 including KSA and UAE if the price of the oil does not rise. The average price of barrel is 55 dollars, if it stays that way the GCC will definitely face a loss, says a local bank economist.

The gulf countries are forced to find other sectors to catch up with the income among low price of oil. The other sources are, cut of allowances and budgets, reduction in unnecessary government spending, employee cutouts, avoid any kind of project being cancelled, other financial challenges and bank flexibility.

Senior economist and director at NBAD economic department Alp Eke said the loss will be huge for KSA, 160 billion dollars approximately. On the other hand UAE will lose more or less of 55 billion dollars.

The fiscal deficits of Bahrain and Oman will stand between -13% to -13.5. This is also expected that the recent digit of deficits will be correspondingly -17% and 10%.

Eke told to the gulf news, KSA and UAE will face the Highest resource reduction. But UAE is in much better position. UAE is well prepared for the upcoming storm. It has enough foreign resources to last longer in the race than others.

KSA is at most venerable position. The population of this country is 31 million. The rate of national unemployment is 11%. The 80% of the population is under 40. They will need education and jobs.

As the strength of the USA dollar increases the price continues to go downwards. The income from gas and oil will drop by 300 billion dollars because of the fall in price. This is a bad news for GCC states.

When the oil prices were high billions of ADH were injected into the treasury of the governments in the gulf countries. The net foreign resources were approximately 3 trillion dollars. But it was been decreasing ever since.