It is expected that the Gulf Arab states lose a trillion dollars over the next five years due to lower oil prices, which forces them to take action to adapt to the new reality, according to a warning issued by the International Monetary Fund.
During the current year alone, the Middle East oil-exporting countries lose $ 360 billion due to lower oil prices, according to Fund estimates.
The fund is advised Gulf Arab states that they need "very urgently" to reforms to adapt to the continuation of this decline for years to come.
The latest report indicates expectations of future fund on the Middle East that the decline in oil prices and the growing unrest in some countries in the region will lead to a cessation of growth at 2.5 percent.
Reports indicate that the conflict between the Gulf states and Iran, and the worsening military conflict in Syria, Yemen and the turmoil in Iraq had a negative impact on the budgets of these countries.
Most of the citizens of the Gulf Cooperation Council (GCC) are working in the public sector, and this pattern has to be changed during the next five years
Masood Ahmed Director, Middle East and Central Asia Department at the International Monetary Fund
According to the IMF report, Syria, Iraq and Yemen are still more economically vulnerable countries, as Jordan and Lebanon also faces considerable economic pressure due to host large numbers of Syrian refugees.
With regard to the deficit in the budget, it will reach 13 percent of GDP this year in the Gulf Cooperation Council (GCC), as quoted by Agence France-Presse for Masood Ahmed Director, Middle East and Central Asia in the International Monetary Fund.
The Council includes Saudi Arabia and the United Arab Emirates, Qatar, Oman, Bahrain and Kuwait.
Masood predicted that the total deficit in the budgets of these countries beyond the next five years a trillion dollars with falling price of a barrel of oil from $ 114 in the month of June last to $ 50 now.
And it contributed to increasing the supply of oil and the weakness of demand at the drastically lower prices.
The Gulf states are advised Monetary Fund to cut spending and to diversify sources of income to meet the expected fiscal deficit and "adapt to the new reality of" constantly on the decline in oil prices.
Proposed measures to adapt to the new reality of lower oil prices include reducing public spending.
The fund is expected that the Gulf countries will be able to take the necessary adjustment measures thanks to the large financial reserves that have accumulated during the years when oil prices rose.
Massoud suggested that Gulf countries reduce support goods and services and the wage bill in the public sector.
"Most of the citizens of the Gulf Cooperation Council (GCC) are working in the public sector, and this pattern has to be changed during the next five years."
Despite the fall in oil prices, the IMF predicted an improvement in the growth of the Iranian economy up to 4 percent in the "medium term".
The fund attributed to an increase in trade and investments with ease international sanctions on Iran after the signing of the nuclear deal with the six powers.
[You must be registered and logged in to see this link.]