Fuel subsidy reforms to make only a modest dent in GCC deficits


Issue 1010 - 18 Feb 2016 | 1 minute read

The spate of cuts to petrol subsidies in the GCC states will lead to savings of around 1% of GDP, according to Moody’s Investors Service. That will help governments to reduce their ballooning budget deficits, but not by much: Oman and Bahrain are still both expected to run fiscal deficits of 17% or more this year, while Saudi Arabia’s is forecast to be around 15% and Kuwait, Qatar and the UAE are expected to come in at 9%-10%. The UAE was first to announce fuel subsidy cuts, last July. Since then most of its neighbours have followed suit – except Kuwait, which is expected to follow in March.

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