Christine Lagarde says the GCC needs to adjust its budgets further to cope with low oil prices in the longer term
Most of the six oil exporting nations in the Gulf Cooperation Council have put in place prudent fiscal policies, and those that haven't can learn from those that have, International Monetary Fund chief Christine Lagarde said on Sunday.
Lagarde made the remarks in a statement after a meeting with senior GCC economic officials in Doha. The plunge of oil and gas prices since last year has slashed governments' energy revenues, saddling most with big deficits.
Lagarde said all the GCC countries needed to adjust their budgets further to cope with low oil prices in the longer term, and that most had introduced fiscal policies which would allow them to make those adjustments from a position of strength, limiting the impact on their economic growth rates.
"Those who have not done it can certainly learn from those who have," she said without naming individual countries.
She also urged GCC countries, including Saudi Arabia and the United Arab Emirates, to introduce a regional value-added tax as soon as possible, since even at a low rate it could raise considerable revenues. That reform should not be delayed, she said.
Lagarde said governments needed to cut the growth of their current spending.
"Given the new fiscal realities, there is not room for public wage bills to grow further. We have to face that reality."