The decline in oil prices during the last quarter of 2014 casts doubts on the GCC governments’ ability to sustain the planned level of spending in 2015, a recent economic report showed here on Tuesday.
However, the release of expansionary budgets by Saudi Arabia, Dubai and Oman set aside all such speculations, showed the report compiled by the Kipco Asset Management Company (KAMCO). Saudi Arabia has budgeted revenues of SAR 715 billion ($190.7 billion) in 2015 whereas expenditures are estimated at SAR 860 billion ($229.3 billion) resulting in a fiscal deficit of SAR 145 billion ($38.6 billion), it said.
Meanwhile, Dubai released a balanced budget at AED 41 billion ($11.2 billion), its largest budget since the global financial crisis, implying a strong growth of 9 percent as compared to 2014, it added. On the banking side, credit facilities extended by Kuwait banks during Q3-14 increased by 1.27 percent to KD 30.62 billion at the end of Sept-2014 fuelled by growth in personal facilities and credit to the real estate sector that added a combined KWD 285 mn or around 74 percent of the total credit growth during the quarter, it indicated.
Meanwhile, in Saudi Arabia, money supply (M2) increased by 3.4 percent during Q3-14 to reach SAR 1,501 billion after growing by 2.9 percent and 4.78 percent in Q2-14 and Q1-14, respectively, driven by ample liquidity with banks and remarkable growth in deposits base and credit facilities.
Whereas, inflation in the Kingdom increased by 0.77 percent in Q3-14 as compared to Q2-14, and by 2.75 percent during the last 12 month, the report said. In the UAE, total credit facilities further improved to AED 1.18 trillion at the end of the Q3- 2014 as the low interest rate and economic recovery led to improvement in lending activities. Whereas, inflation edged to its highest level in more than five years, to report 2.9 percent in the last 12M-period ending Sept-14, as a result of rising rents and food prices, the report noted.