Rising debts and higher cost of funds could pose challenges to GCC | GulfNews.com

Rising debts and higher cost of funds could pose challenges to GCC | GulfNews.com:

"While public debt levels remain at manageable levels for most GCC countries, the rapid build-up in debt levels combined with a rising cost of funds, changes in credit global conditions and exchange rate dynamics could pose future financing risks for some of these countries, according to analysts and economists.
According to the latest regional economic outlook from the International Monetary Fund (IMF), the debt positions of the Middle East’s oil exporters have increased by an average of 10 percentage points of gross domestic product (GDP) each year since 2013, with countries financing large fiscal deficits through a combination of draw-downs of buffers (where available) and increased domestic and foreign borrowing.

“Looking ahead, several factors are likely to continue to drive debt upward for oil exporters. These include the slower pace of fiscal consolidation, weak growth prospects, and the possibility of higher financing costs — given the expected monetary policy tightening in advanced economies,” said Jihad Azour, the IMF’s director of the Middle East and Central Asia Department."



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