Economic growth in Gulf countries is likely to slow to 3.5 percent this year as oil revenues plummet due to a worsening global outlook, the International Monetary Fund (IMF) said Sunday. “For the oil exporters, the decline in oil prices and OPEC production cuts are projected to reduce oil export receipts by almost 50 percent in 2009,” Masood Ahmed, director of IMF's Middle East and Central Asia Department, said in a statement after a presentation in Dubai. “This implies a loss of government revenue to the tune of $300 billion compared to 2008,” he said. However, increased government spending could help bolster the Gulf region's economies, which are estimated to have grown by 6.8 percent in 2008, Ahmad said. He said the size of the slowdown would also depend on the extent of the crisis in the United States and Europe. “As long as oil exporters in the region maintain their spending and investment plans, the impact of the global slowdown on their own growth, and on the prospects for the region, will be partly cushioned,” he added. Overall, the regional economy in the Gulf is expected to grow by 5.4 percent in 2010, according to the report. The global economic slowdown has battered demand for oil, which has lost more than $100 since reaching a life-time high of $147 in July 2008, dampening the outlook for oil exporters worldwide. The IMF sees oil prices averaging about $50 a barrel this year, down from about $100 in 2008. Kuwait, a significant OPEC member, already announced plans to cut spending by a massive 36 percent in its next fiscal year, while the United Arab Emirates (UAE), the world's fifth-top oil exporter, said it would boost public spending by 42 percent.
