Credit FAQ: GCC Government Funding Needs Increase Sharply On Low Oil Prices And COVID-19

By 22/07/2020

Government funding needs in the Gulf Cooperation Council (GCC) have increased significantly in 2020, as low oil prices and the economic repercussions of the COVID-19 pandemic have significantly widened governments’ fiscal deficits. We expect total GCC government debt to increase by a record-high of about $100 billion in 2020 alone, with an additional $80 billion run-down in government assets to finance an aggregate GCC central government deficit of about $180 billion. Based on our macroeconomic assumptions, we expect to see GCC government balance sheets continue to deteriorate up until 2023.