IMF: GCC nations on track to cut budget deficits
the problem was mooted by Arvind Subramanian and other advisers to the finance minister in India’s annual Economic Survey in January.
State-run banks will need more than the 700 billion rupees (RM47.19 billion) that the government planned to infuse under a DUBAI: Oil-exporting Arab states of the Gulf are heading “in the right direction” to plug budgetary gaps thanks to fiscal reforms, but more change is still necessary, said the International Monetary Fund (IMF) yesterday.
“If they continue on this path in the next three to five years, the level of deficit will be less than two per cent” of gross domestic product, said IMF regional chief Jihad Azour.
“This is going in the right direction,” said Azour, who yesterday launched the IMF update for its regional Economic Outlook for the Middle East and central Asia.
Revenues in the oil-dependent economies of the six Gulf Cooperation Council (GCC) states have nosedived since the price of crude plummeted from its mid2014 peak, forcing the monarchies to cut expenditure.
Such cuts have included energy subsidies in nations that have traditionally subsidised main services both for their own citizens and also for large populations of expatriate workers.
“Fiscal adjustment is still needed. Additional reforms are still needed, especially on the structural side,” said Azour. AFP revamp plan proposed in 2015, said Panagariya. “Since then, the scale of NPAs has grown,” he said.
Past attempts to solve the problem by injecting cash into banks to boost their capital buffers haven’t led to a revival of loan growth. Bloomberg
Ridding India’s bank balance sheets of bad loans is crucial to furthering Prime Minister Narendra Modi’s goal of creating more jobs in the US$2 trillion economy.