The International Monetary Fund (IMF) on Monday said that oil exporters in the Middle East had lost $390 billion in revenue due to lower oil prices in 2015, but warned that they could face even worse losses this year.
The IMF in a report said the revenue losses of the region’s oil exporters could reach between $490 billion to $540 billion as oil prices are expected to plunge deeper.
The Fund had projected in October that oil exporting countries in the region would see revenue losses of $360 billion in 2015, but oil prices took a tumble by year’s end and the drop in revenue amounted to $30 billion more.
The IMF has further warned that revenue losses for the Middle Eastern oil exporters could translate into budget deficits and slower economic growth, particularly for countries like Saudi Arabia that are still heavily dependent on oil to finance their spending.
Though the kingdom has been working on plans to overhaul its economy, oil still accounted for 72 percent of total revenue last year and Saudi Arabia projects a budget deficit of nearly $90 billion this year, said the Fund in its report.
The IMF further said that the economic growth in Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates will slow from 3.3 percent in 2015 to 1.8 percent this year.
Saudi Arabia, the region’s biggest economy, will see growth at just above 2 percent.
“Oil prices are likely to improve from where they are, but they’re not going to go back to the figures that we saw in 2013 and 2014 for a long, long time, so this means that many of them have to cut back spending and they also have to try to raise revenue outside the oil sector,” Masood Ahmed, the IMF director for Middle East and Central Asia, has been quoted as saying by the Associated Press.