DUBAI: Arab states of the energy-rich Gulf are expected to accumulate $490 billion in deficits by 2023 due to the double hit of low oil prices and the coronavirus slowdown, Standard and Poors said Monday.

The six-nation Gulf Cooperation Council is estimated to post a combined budget deficit of $180 billion this year alone, the ratings agency said in a report. It based its estimates on an average oil price of $30 a barrel this year, forecast to rise to $55 in 2022.

Government funding needs in the GCC - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - have increased significantly this year, S&P said. "We expect total GCC government debt to increase by a record high of about $100 billion in 2020 alone," it said.

An additional $80 billion will be withdrawn from government assets, estimated at $2 trillion, to plug the budget shortfall. "Based on our macroeconomic assumptions, we expect to see GCC government balance sheets continue to deteriorate up until 2023," when deficits would have accumulated to $490 billion, it said.

The coronavirus pandemic has hit global oil demand hard, leading to a crash in oil prices to a two-decade low before a partial recovery. The International Monetary Fund this month estimated the six GCC states stand to lose around $200 billion in oil revenues this year.

The IMF also forecast that GCC growth in 2020 would shrink by 7.1 percent, the lowest in almost four decades, as a result of the pandemic and low oil prices. S&P said Saudi Arabia, the largest Arab economy, will account for 55 percent of the total GCC deficits, followed by Kuwait with 17 percent and Abu Dhabi with 11 percent.