‘Major adjustments’ needed in oil-rich Gulf states, IMF warns

Dubai: The International Monetary Fund (IMF) warned on Tuesday not enough is being done by oil-rich Gulf states and other major Middle East oil exporters to counter the drop in global oil prices.

Masood Ahmad, Director of the IMFs Middle East and Central Asia Department, said at the Arab Strategy Forum in Dubai that there needs to be “major adjustments” in the fiscal policies of the Arab gulf states and Algeria whose economies are heavily reliant on oil sales.

Ahmed said the Gulf states and Algeria need to consider introducing a value added tax and should review capital projects and the size of public sector.

The Gulf states are the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.

Benchmark brent crude fell to a six year low of around $36 a barrel earlier this year month compared to $115 a barrel in June, 2014.