(MENAFN) UAE is forecasted to witness a fiscal deficit in 2015 for the first time since 2010, amounting to 2.9 percent of GDP, as opposed to a surplus of 7.2 percent of GDP in the previous year.
Fiscal savings from the subsidy reform will be higher in the medium term as oil prices are predicted to rise, plus linking retail prices to global prices will lower uncertainty over future transfers.
Additionally, In January 2015, Abu Dhabi's rulers raised prices for water and electricity in the emirate, further proving the authorities' willingness to transfer a growing share of production costs to end-users.
"The drop in oil prices has put pressure on GCC governments to accelerate subsidy reforms, as declining hydrocarbon revenues and sticky spending have reduced fiscal space," stated the ratings agency.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.