Saudi Arabia needs oil prices at $70 a barrel (bbl) next year to break even, the International Monetary Fund (IMF) said in its Regional Economic Outlook launched Tuesday.
The Kingdom had fiscal breakeven oil price of $96.6/bbl in 2016 and for 2017 it was $73.1, statistics released as part of the report showed. The breakeven, IMF noted, is the oil price at which the fiscal balance is zero.
Saudi Arabia, the largest oil producer among OPEC members, marked the biggest cut in its breakeven price between 2016 and 2017.
Kuwait and Qatar held the lowest breakeven price both for this year and the next.
For 2017, Kuwait’s breakeven was $46.5/bbl, while Qatar’s was $46.8/bbl. In 2018, it was $47.1/bbl for Kuwait and $47.2/bbl for Qatar, the report said.
Gulf states have been working hard to reduce spending and plug budget deficits, following the sharp fall in oil prices from mid-2014 highs of above $100/bbl.
“Oil exporters should continue pursuing deficit-reduction plans to maintain fiscal sustainability and, where relevant, to support exchange rate pegs,” the IMF said.
The Fund, which forecast oil to average $53/bbl over medium-term, expects economic growth in the Gulf region to ease to its lowest level at 0.5 percent this year.
Non-oil growth is forecast to recover to 2.6 percent and 2.4 percent in 2017 and 2018, respectively, amid a slowdown in financial regulation.
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