With earnings from oil accounting for more than 80% of government income, the halving of prices since June has eroded state revenue and could impact the extensive capital works programme in 2015, despite a government pledge to hike this year’s spending by 4.5% from its earlier plans.
Strong fundamentals and a diversified economy are keeping concerns at bay in Dubai, despite a potential cooling of investor sentiment across the region and weakening global conditions.
Despite the turmoil in global energy markets, Saudi Arabia moved towards the end of 2014 with its economy having outperformed many in the region.
The economy of Jordan is picking up strength with forecasts for higher year-on-year growth this year and next, while lower oil prices should provide at least a temporary respite from the kingdom’s energy burden.
While diversification strategies aimed at moving economies away from hydrocarbon dependency have become commonplace around the Gulf in recent years, the practical implementation of these strategies has often proved challenging.
Plummeting oil prices have brought renewed calls for Kuwait to deepen its focus on diversifying its economy and reducing hydrocarbon dependency.
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