UAE fiscal balance to remain in surplus with oil at $75: Moody’s

UAE fiscal balance to remain in surplus with oil at $75: Moody’s

The rating agency said a revenue windfall from elevated oil prices, despite recent declines, will allow most GCC governments to lower debt burdens and rebuild fiscal buffers

An oil refinery is lit up by lights in Saudi Arabia. The rating agency said fiscal balances would remain in surplus in UAE and Qatar in an average oil price scenario of $75/barrel but turn into moderate deficits in Kuwait, Oman, and Saudi Arabia.

Published: Wed 18 Jan 2023, 6:58 PM

Fiscal balances of the UAE and Qatar will remain in surplus under an average oil price of $75 per barrel in 2023, Moody's said on Wednesday as it affirmed a positive creditworthiness outlook for GCC sovereigns in 2023.

The rating agency said a revenue windfall from elevated oil prices, despite recent declines, will allow most GCC governments to lower debt burdens and rebuild fiscal buffers.

According to estimates by analysts, the fiscal breakeven oil price for the UAE in 2022 was $60.4 per barrel.

A further boosting of fiscal buffers would further unwind the GCC countries’ balance sheet erosion that took place during 2015-20 and increase their capacity to deal with future shocks, Moody’s said in its report.

The rating agency said fiscal balances would remain in surplus in