WASHINGTON The International Monetary Fund (IMF) experts welcomed in a new paper, unveiled on Thursday, the efforts being made by the oil rich Gulf Cooperation Council (GCC) member states to curb overreliance on oil revenues and to diversify their sources of income.
The paper, themed “The Future of Oil and Fiscal Sustainability in the GCC Region,” was coauthored by IMF staff team of the Middle East and Central Asia and Research departments; it was supervised by Tim Callen.
The team includes Tokhir Mirzoev, Ling Zhu, Yang Yang, Andrea Pescatori and Akito Matsumoto.
The oil market is undergoing fundamental change. New technologies are increasing the supply of oil from old and new sources, while rising concerns over the environment are seeing the world gradually moving away from oil.
This spells a significant challenge for oil exporting countries, including those of the Gulf Cooperation Council (GCC) who account for a fifth of the world’s oil production, according to the paper. The GCC countries have recognized the need to reduce their reliance on oil and are all implementing reforms to diversify their economies as well as fiscal and external revenues.
Nevertheless, as global oil demand is expected to peak in the next two decades, the associated fiscal imperative could be both larger and more urgent than implied by the GCC countries’ existing plans.
IMF projects global oil demand to peak around 2040, noting that iImplications for oil exporting countries could be significant.
Source: Kuwait News Agency