Wealthy Gulf states are likely to see their oil and gas revenues drop next year but heavy government spending and increasingly energetic private sectors will keep economic growth robust, a Reuters poll showed on Monday. Global oil prices are expected to fall moderately in 2014 as new supply comes on line from the United States, Iraq and other countries. Futures markets indicate lower prices next year.
This will probably push down hydrocarbon export revenues throughout the Gulf. The poll of 15 analysts predicted that Saudi Arabia's revenues would slip to a median $293.3 billion next year from $312.1 billion in 2013. "The decline in the oil price will weigh on the external and fiscal surpluses in the region," said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.
Nevertheless, with the exception of tiny Bahrain, state finances in the six countries of the Gulf Co-operation Council are expected to remain healthy enough for governments to boost spending if that proves necessary to support growth. Saudi Arabia's fiscal surplus is projected to fall from a median estimate of 8.1 percent of gross domestic product this year to a still-high 5.2 percent in 2014. Meanwhile, consumer spending booms and governments' efforts to stimulate private sector business mean Gulf economies can keep some of their momentum even if their state-run oil sectors slow.
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