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International Monetary Fund: Leader of Organization Encourages Gulf to Adjust Budgets Amid Oil Price Fall

International Monetary Fund: Leader of Organization Encourages Gulf to Adjust Budgets Amid Oil Price Fall:

International Monetary Fund leader Christine Lagarde encouraged Gulf states to fix their budgets and warned that international energy costs could stay low for years.

Talking after assembly ministers and officials from the six-nation Gulf Cooperation Council (GCC) in Qatar’s capital Doha, Lagarde warned the nations could no longer rely on revenues from gas and oil.

“We think the cost of petroleum will probably continue in the level where it’s for several years and consequently all GCC states should undertake some measure of fiscal adjustment,” the six said at a news conference.

She said the IMF considered increase across GCC states would drop from 3.2 percent this year to 2.7 percent in 2016.

Lagarde additionally said that export earnings would be $275 billion (256 billion euros) lower in 2014 because of low energy costs.

Lagarde said adjustments should include “business management” on spending, especially on public sector wages, and supporting private sector increase.

“Well-planned financial consolidation strategies should be set in place when possible and conveyed so that individuals realize the method by which the adjustment will take place,” Lagarde said.

Lagarde said the “size and urgency of this alteration” changed for states to the other side of the GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia as well as the United Arab Emirates.

One of these states which will need to correct is Qatar.

The 2022 soccer World Cup sponsor has embarked on a vast capital spending programme recently but at the exact same ness convention, the Finance Minister in Qatar Ali Shareef Al-Emadi affirmed that a budget deficit would run .

“Given what we see now with petroleum costs, we expect that we’re going to really have a deficit and we will be realistic with regard to our strategy,” he said.

The emir said on Tuesday that he expected the world-wide drop in energy costs would help reduce dependence on the state in Qatar.

The emir warned of “wasteful spending, overstaffing as well as too little responsibility” in the nation at a meeting of Qatar’s Advisory council, and raised issues about “dependence on the state to provide for everything”.