Declining oil prices to reduce income of oil producers: IMF

DUBAI: The International Monetary Fund has said that oil producers of the Middle East will see a considerable slowdown in economic growth this year with earnings from crude oil sliding by half.

"For the oil exporters, the decline in oil prices and OPEC production cuts are projected to reduce oil export receipts by almost 50 per cent in 2009. This implies a loss of government revenue to the tune of USD 300 billion compared to 2008," Director of the IMF's Middle East and Central Asia Department, Masood Ahmed said.

"Nevertheless, most governments - especially those in the Gulf Cooperation Council - have so far indicated that they will maintain their spending and investment plans.

As a result, oil exporters' current account surplus of around USD 400 billion in 2008 is expected to turn into a deficit of USD 30 billion in 2009."

"For most countries, this deterioration is from a position of significant strength, and thus can comfortably be sustained by the large stock of reserves that these economies have built up," Ahmed said.

"By continuing to spend, oil-exporting countries are contributing substantially to supporting global demand and are acting as stabilisers during the global downturn" he added.