(MENAFN) The International Monetary Fund (IMF) stated that oil-exporting countries in the Gulf Cooperation Council (GCC) should cut expenditure to maintain fiscal surpluses, reported Arabian Business.
Total spending by the GCC governments grew by 20 percent in dollar terms last year, as the political, economic and social upheaval in the Middle East has prompted countries to boost expenditure.
According to the IMF's estimates, combined fiscal surplus of the GCC was at 13 percent of gross domestic product (GDP) in the period, and is forecasted to remain around that level in 2012.
If these governments continue to increase spending, fiscal and external surpluses are, with unchanged policies, expected to drop next year and beyond, whereas the combined fiscal surplus would turn to deficit around 2017.
By 2017, the GCC's joint, public external assets are forecasted to surpass USD3 trillion under the baseline scenario, however, in the downside scenario, assets would be USD2.2 trillion, but still above an expected USD1.9 trillion at the end of the current year.
It is worth noting that in the first quarter of 2012, European bank claims on the GCC reached USD220 billion, out of USD328 billion for all foreign banks.