Virus-hit Gulf has little room to boost revenue after oil price shock - Reuters

Virus-hit Gulf has little room to boost revenue after oil price shock - Reuters:

The coronavirus outbreak and plunging crude prices are a double blow that leaves Gulf Arab governments with few options to manage fiscal stability while trying to shield their economies and defend currency pegs.

Even the largest Arab economy, Saudi Arabia, which launched a war for market share with Russia following the March 6 collapse of an output deal between OPEC and its allies that has wiped 30% off oil prices, will face strains.

The last oil price rout in 2014 saw the region, which relies on energy exports, slash subsidies, introduce taxes to diversify revenue sources and try to shrink lavish cradle-to-grave welfare systems and bloated public sectors.

Now, a focus on stimulating economic activity and easing the impact on their populations of the spreading coronavirus makes it difficult for the six Gulf Cooperation Council (GCC) governments to hike taxes or cut subsidies.