Standard & Poor’s credit rating agency expected, on Monday, the deterioration of the budgets of the Gulf Cooperation Council countries during the current year until 2023, driven by the consequences of the Corona virus and the decline in oil prices.
The agency said in a statement today that its estimates depended on the average price of a barrel of $ 30 this year, to ascend to an average of $ 50 in 2021, then $ 55 in 2022.
The equilibrium price for a barrel of oil varies in the budgets of the Gulf states, as the equilibrium price is about 55 dollars in countries like Kuwait, while it rises to an average of 70-75 dollars in Saudi Arabia.
The agency added: “Our expectations indicate a deficit of $ 180 billion in the budgets of the Gulf states in 2020 … The debt instruments will be used by $ 100 billion, and the rest will be compensated from the assets of those reserve countries.”
The Corona pandemic has caused contraction of economic activities around the world, including the Gulf states, resulting in a reduction in production and demand for consumption, and pushed oil prices down to an average of $ 15 a barrel last April.
Between 2020 and 2023, Standard & Poor’s predicted that the governments of the Gulf states will reach a deficit of $ 490 billion, at the forefront of Saudi Arabia, which is ranked the world’s largest crude oil exporter.
Last week, the Kuwaiti National Assembly (Parliament) said that the Financial and Economic Affairs Committee discussed a draft law on authorizing the government to hold loans (public debt), with a value of about 20 billion dinars (65 billion dollars) for a period of 30 years.