Tuesday 11 February 2014

Why the economic outlook for Russia and the GCC Oil States looks so very similar « ArabianMoney

Why the economic outlook for Russia and the GCC Oil States looks so very similar « ArabianMoney:



"Today Brent crude oil is selling for $109 a barrel. That’s a great cash flow for the GCC Oil States and it is also a huge cash cow for the world’s largest producer of oil, among many other natural resources, the Russian Republic which is hosting the Winter Olympics in Sochi on the Black Sea for the next couple of weeks.



Russia currently runs a current account surplus. There’s an enviable $90 billion in a reserve account. Government debt is not much more than 15 per cent of GDP and personal taxation is set at the same low level.



It is a similar story in the GCC Oil States: modest government borrowing is massively offest by the sovereign wealth funds of accumulated oil revenues; current account surpluses due to record oil revenues; low or no taxation."



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