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Oil exporting countries to adjust government spending plan has been "urgent"
- Categories:Industry News
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- Time of issue:2020-03-31 14:57
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Oil exporting countries to adjust government spending plan has been "urgent"
- Categories:Industry News
- Author:
- Origin:
- Time of issue:2020-03-31 14:57
- Views:
Information
According to IMF (International Monetary Fund), the latest release of the region's former outlook report, due to political turmoil in the Middle East, oil prices fell sharply, oil exports to adjust government spending plans have been urgent".
IMF forecast the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region in 2015 economic growth rate of 2.7, lower than last year's 0.5, 2.5% percentage points lower than the last time in May.
The main reason is that the price of oil fell by 50% since June 2014 (when Brent crude was $114 a barrel, now only $48). Second reasons for the large area of civil war and armed conflict in the region, the increasing political turmoil.
Ahmed Masood, director of the Middle East and Asia, is the author of the report. He said: "the short-term prospects for the MENAP region in the geopolitical and oil prices."
"The complex conflicts in Iraq, Libya, Syria and Yemen have also lost confidence in the market," he said."
Oil exporting countries need to adjust expenditure
Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the United Arab Emirates, Algeria and Libya all belong to the powerful oil Exporting Countries OPEC (OPEC). Because of lower oil prices, the country's government revenue fell sharply.
Despite the pressure from governments, OPEC has so far refused to cut oil production to raise prices, the aim is to maintain market share, and to impose pressure on the U.S. shale oil production enterprises.
IMF forecasts that the region's oil exporting countries will continue to maintain low oil prices, the MENA region (in addition to Afghanistan and Pakistan) revenue will be reduced by $360000000000.
Oil prices fell for the MENAP oil exporting countries to adjust fiscal policy has increased the urgency, IMF is expected in 2015, MENAP oil exporting countries will account for 12.7% of the fiscal deficit, MENAP GDP import country's fiscal deficit accounted for 7.3% of GDP.
For OPEC's largest oil producer and the fact that Saudi Arabia, IMF predicts that the fiscal deficit will account for GDP21.6% in 2015, and to urge the government to adjust its spending.
"The decline in oil prices is likely to be fast and lasting, so oil exporters need adjust the balance of payments policy, ensure fiscal sustainability, modern mind balance and progressive reconstruction policy swing space", the IMF warned said adjustment plan issued by the MENAP most oil exporting countries "insufficient to make up for the massive fiscal challenges."
IMF also warned that if the regional conflicts (such as Syria, Iraq, Libya and the Yemen civil war), then the financial challenges are more durable than expected."
Positive side?
While the current situation in the Middle East oil exporting countries is not so optimistic, oil importing countries, such as Egypt, Jordan, Syria and Lebanon, have benefited from lower oil prices. "It is also benefiting from economic reform and growth in the euro area," IMF commented.
Oil importing countries to strengthen recovery may be a blow to the global economic slowdown. As the world's largest economy, China's economic slowdown is causing concern for all of the world's second largest economies, the world's largest economy.
In early 10, IMF review of the global growth data, is expected to grow by 3.1% in 2015, while the growth rate of 3.6% in 2016.
Although IMF said the MENAP region in 2016 to achieve the growth rate of 4%, by improving the prospects for Iran, recovery of oil production and exports and ease of regional conflicts, but next year's forecast is still considerable uncertainty.
In addition, in the long run, to improve the economic prospects need to carry out large-scale structural reform."
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