Gulf governments enjoy fiscal flexibility; must spend wisely over coming years
Pro: With lower energy prices forecasted in the short-term, GCC governments will have to spend smartly to ensure momentum continues for their economic diversification efforts.
To:
Al-Monitor Pro Members
From:
Dr. Robert Mogielnicki
Senior Resident Scholar, Arab Gulf States Institute in Washington
Date:
Jan. 27, 2023
Bottom Line:
The public sector revenues of governments in Gulf Cooperation Council (GCC) member states remain closely tied to proceeds from oil and gas exports. Elevated energy prices in 2022 permitted GCC states to begin 2023 in relatively strong fiscal positions. Short-term energy outlooks forecast lower oil and gas prices, but past fiscal reform progress will help reduce the negative impact on budgets. Regional governments must exercise smart spending to ensure momentum continues for their respective economic diversification efforts.