Some Gulf Cooperation Council (GCC) member states are expected to suffer budget deficit next year due to the sharp decline in prices of oil, the main source of national income in the Gulf region, forecasted Tuesday the Advisor to the International Monetary Fund (IMF)'s Middle East and Central Asia Department Raja M. Almarzoqi.
The IMF advises oil producing countries to set conservative hypothetical prices for oil in state budgets to avoid recording deficits, Al-Marzoqi told reporters on the sidelines of the Regional Workshop for Parliamentarians from Mashreq and Maghreb Countries (O-PARL), which kicked off here today.
He pointed out that oil hypothetical price should be based on the average price during the past years and the average of the excepted future price in the coming years.
Al-Marzoqi described the hypothetical oil price in Kuwait's state budget as conservative.
With regard to the recent drop in oil prices, he argued that the decline is driven by technical factors mainly the weak demand and oversupply.
He projected that the current oil price downfall trend would continue on the short run.
The three-day Regional Workshop for Parliamentarians from Mashreq and Maghreb Countries (O-PARL) is organized by the IMF's Middle East and Central Asia Department (MCD), the IMF-Middle East Center for Economics and Finance (CEF), and the World Trade Organization (WTO).
The workshop aims at exposing parliamentarians to the role of IMF and WTO in the region and explaining the economic policies recommended by the IMF. It provides a forum for parliamentarians to exchange views on their experiences in economic policies, including emerging challenges and issues.
Over 26 parliamentarians from Algeria, Iraq, Jordan, Lebanon, Libya, Morocco, Tunisia, West Bank and Gaza, and Yemen are participating in the workshop.