Oil production cuts to push GCC budgets deeper into deficit – Fitch – ZAWYA

Oil production cuts to push GCC budgets deeper into deficit – Fitch – ZAWYA

The OPEC+ agreement and output cuts announced recently will push GCC budgets deeper into deficit as they will contribute to a stark contraction in economic output, along with a recession in non-oil economies in the GCC, Fitch Ratings said.. "We now expect most GCC sovereigns to post fiscal deficits of 15 percent-25 percent of GDP in 2020, with only Qatar's deficit staying in the single digits at 8 percent of GDP.. A further decline of $10 per barrel in average prices this year would increase deficits by 4 percent to 6 percent of GDP, while a 5 percent cut to production would widen fiscal deficits by 1 percent to 2 percent of GDP.. According to the ratings agency, these amount to nearly 30 percent of GDP in Bahrain and Oman, more than 10 percent of GDP in Kuwait, Qatar and the UAE and over 7 percent of GDP in Saudi Arabia.. The ratings agency forecasts a non-oil recession ranging from a decline of 1 percent in Kuwait to 5 percent in Oman..