Kuwaiti finance minister, Anas Al-Saleh, has warned its GCC neighbours that low oil prices will inevitably lead to cuts in state spending and reshaping of national budgets.
“We must undertake comprehensive economic reforms including the reform of imbalances in public finances,” Saleh told a meeting of Gulf Arab finance ministers, central bank governors and the International Monetary Fund in Kuwait.
“This must be undertaken through strengthening of efforts to diversify away from oil and decrease dependence on oil revenue, which is now inevitable.”
With the price of oil falling to just $83 per barrel, some GCC nations are starting to feel the pinch.
The IMF has estimated that Saudi Arabia will need an average oil price of $90.70 a barrel in 2015 to balance its budget; the United Arab Emirates would face a level of $73.30, Kuwait $53.30 and Qatar $77.60. Oman and Bahrain need much higher budget break-even prices.
