RIYADH: Public finances in the Gulf Cooperation Council countries are expected to maintain a stable trajectory, with a projected stabilization of public debt at 28 percent of the gross domestic product in 2024 and 2025.
According to the latest data from the Gulf Statistical Center, the region’s fiscal outlook remains positive, building on a surplus of $2 billion in 2023, Emirati news agency WAM reported.
This comes as GCC countries posted a financial surplus of $134 billion in 2022, representing 6.1 percent of their GDP. Public debt reached approximately $628 billion in 2023, compared to $144 billion in 2014, while the debt-to-GDP ratio peaked at 40.3 percent in 2020 before declining to 29.8 percent in 2023.
Earlier this month, Saudi Arabia reached a milestone in public financial management by successfully transitioning to the International Public Sector Accounting Standards on an accrual basis. The move aligns with the Kingdom’s broader efforts to modernize its public sector financial practices as part of its Vision 2030 agenda.
GCC-Stat said that financial risks for countries in the region will remain low in the short term, driven by forecasts of locally and globally stable or declining interest rates.
Citing recent reports from credit rating agencies, GCC-Stat added that the credit attractiveness of the regional countries is expected to improve, which will allow for the rescheduling of public debts at lower financial costs.
Affirming the growth of GCC economies, credit rating agency Moody’s projected in November that Saudi Arabia’s economy will grow by 1.7 percent this year, before accelerating to 4.7 percent in 2025 and 2026. The agency also forecasted that the UAE’s economy will expand by 3.8 percent in 2024 and 4.8 percent in 2025.
GCC-Stat said that the fiscal budget reforms planned by GCC nations could contribute to striking a balance between maintaining economic growth and sustaining public spending.
According to the report, total public revenues in the GCC amounted to $641 billion in 2023, with oil revenues contributing 62 per cent. In 2022, public revenues in the region totaled $723 billion, with oil revenues accounting for 67 percent.
Total public spending in the GCC reached its highest level in 2023, hitting $639 billion. The report said that current spending accounted for 85 percent of public spending in 2023, while investment spending comprised 15 percent.
