(MENAFN) The International Monetary Fund (IMF) has advised the Gulf Cooperation Council states to cut their spending as the prices of oil continue with their decline, reaching their five-year low, Gulf News reported.
The IMF said that most GCC countries should trim spending at a gradual pace, to avoid hurting the economy, adding that their spending should be focused on expanding their non-oil sector of the economy to avoid being negatively affected in case the oil prices persisted in their decline.
Oil prices have started declining since June by almost 50 percent, due to weaker demand out of Europe and China as well as increased production in the United States.
"The Gulf states have significant assets and currency reserves that will be able to prop up the economies for the time being, however, the UAE is already at a risk of having to use its foreign assets, while the rising domestic energy consumption in the Middle East is reducing some pressures on the global oil surplus," the IMF's head of mission for the UAE said.
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