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[size=33]Report: $ 100 billion is needed in the Middle East from external financing[/size]
- According to the expectations of the Institute of International Finance - driven by the high needs of the six Gulf countries that suffer from low oil prices.
Ahmed Hatim / Anatolia
The Institute of International Finance expected, on Thursday, that the total external financing needs in the Middle East and North Africa region will reach 100 billion dollars in 2021, largely driven by the six countries of the Gulf Cooperation Council.
The institute said in a report that dependence on external financing will remain high during the next year, in light of expectations that oil prices will remain below $ 50 a barrel in the foreseeable future.
The institute estimated the public financing needs (internal and external) in 9 oil-exporting countries in the region (Saudi Arabia - UAE - Qatar - Kuwait - Oman - Bahrain - Algeria - Iraq - Iran) at $ 220 billion during 2020, then $ 208 billion next year.
While the public financing needs of 6 oil importing countries, including (Egypt - Morocco - Tunisia - Jordan - Lebanon - Sudan) during the current and next two years will reach about $ 170 billion and $ 175 billion, respectively.
He added that sovereigns are increasingly using international capital markets to finance their huge fiscal deficits.
The institute expected a slight increase in foreign capital flows to the Middle East region as a whole in 2021 to 177 billion dollars in 2021.
The report stated that low oil prices will push the Gulf Cooperation Council countries to implement serious measures to amend public finances to put their financial resources on more sustainable foundations.
He expected that Kuwait would pass a public debt law in early 2021, which would allow it to borrow abroad and increase debt issues from the region. In addition to the large bond issues for Saudi Arabia and the UAE.
The decline in oil prices leads to the transfer of the combined current account of the Gulf countries from a surplus of 98 billion dollars last year to a deficit of 24 billion dollars and 12 billion dollars during 2020 and 2021.
The Institute of International Finance, a global institution that includes more than 470 financial institutions, has a mission to support the financial industry and manage risks, and includes in its membership global central banks, major international banks, insurance companies, pension funds, asset managers and sovereign wealth funds.
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