Most Arab oil exporting countries in the Gulf should plan to reduce growth in government spending to make their budgets more sustainable, as their combined surplus could turn into a deficit around 2017, the International
Monetary Fund said on Monday.
"While expansionary fiscal policies helped the region weather the global financial crisis, given the healthy economic expansion currently underway, the need for continued fiscal stimulus is diminishing," the IMF said in a report. "Most GCC countries should therefore plan to reduce the growth rate in government expenditure in the period ahead."
In 2011, total state spending in the six Gulf Cooperation Council economies -- Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain -- jumped by some 20 percent in dollar terms, the IMF said. Governments were responding to unrest in the Middle East by boosting social spending.
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