{"id":116835,"date":"2021-06-21T11:06:26","date_gmt":"2021-06-21T11:06:26","guid":{"rendered":"https:\/\/fin2me.com\/?p=116835"},"modified":"2021-06-21T11:06:26","modified_gmt":"2021-06-21T11:06:26","slug":"gulf-states-will-take-at-least-10-years-to-end-oil-dependence-moodys","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/gulf-states-will-take-at-least-10-years-to-end-oil-dependence-moodys\/","title":{"rendered":"Gulf states will take at least 10 years to end oil dependence – Moody's"},"content":{"rendered":"

DUBAI (Reuters) – Countries in the oil-exporting Gulf will remain heavily dependent on hydrocarbon production for at least the next ten years as efforts to diversify economies have made limited progress since the 2014-2015 oil price shock, Moody\u2019s said.<\/p>

FILE PHOTO: An employee looks on at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS\/Maxim Shemetov<\/figcaption>

Reliance on the energy sector will be the \u201ckey credit constraint\u201d for the six countries forming the Gulf Cooperation Council (GCC), the ratings agency said in a report on Monday.<\/p>\n

\u201cIf oil prices average $55\/barrel … we expect hydrocarbon production to remain the single largest contributor to GCC sovereigns\u2019 GDP, the main source of government revenue and, therefore, the key driver of fiscal strength over at least the next decade,\u201d it said.<\/p>\n

Oil and gas accounts for over 20% of gross domestic product and at least 50% of state revenues for most Gulf countries.<\/p>\n

Meanwhile, plans to launch new economic sectors have often overlapped, creating competition among GCC states and constraining room for growth.<\/p>\n

\u201cWhile we expect the diversification momentum to pick up, it will be dampened by reduced availability of resources to fund diversification projects in a lower oil price environment and by intra-GCC competition,\u201d Moody\u2019s said.<\/p>\n

Part of the problem is that the social contract between GCC states and citizens \u2013 employment, free education and healthcare for life in exchange for political acquiescence – limits the ability to implement spending cuts or introduce taxes.<\/p>\n

Saudi Arabia, the region\u2019s largest economy, tripled a value-added tax last year to 15% on the back of the pandemic and lower demand for oil. In April Crown Prince Mohammed bin Salman said VAT would be reduced, and ruled out introducing personal income taxes.<\/p>\n

Moody\u2019s said non-oil growth in the region is effectively subsidised through zero or very low direct taxes.<\/p>\n

Broad income-based taxes – needed to durably reduce dependence on oil – are likely to be implemented only in the longer term, it said.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

DUBAI (Reuters) – Countries in the oil-exporting Gulf will remain heavily dependent on hydrocarbon production for at least the next ten years as efforts to […]<\/p>\n","protected":false},"author":3,"featured_media":116834,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nGulf states will take at least 10 years to end oil dependence - Moody's - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/gulf-states-will-take-at-least-10-years-to-end-oil-dependence-moodys\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gulf states will take at least 10 years to end oil dependence - Moody's - Fin2me\" \/>\n<meta property=\"og:description\" content=\"DUBAI (Reuters) – Countries in the oil-exporting Gulf will remain heavily dependent on hydrocarbon production for at least the next ten years as efforts to [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/markets\/gulf-states-will-take-at-least-10-years-to-end-oil-dependence-moodys\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-21T11:06:26+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/06\/Gulf-states-will-take-at-least-10-years-to-end-oil-dependence-Moodys.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/markets\/gulf-states-will-take-at-least-10-years-to-end-oil-dependence-moodys\/\",\"url\":\"https:\/\/fin2me.com\/markets\/gulf-states-will-take-at-least-10-years-to-end-oil-dependence-moodys\/\",\"name\":\"Gulf states will take at least 10 years to end oil dependence - 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