Qatar’s fiscal breakeven price of oil has risen 95% between 2008 and 2018 compared to high three-digit increases in the UAE and Saudi Arabia, according to Kamco, a regional economic think-tank.
The fiscal breakeven price of oil in Qatar amounted to $47.1 per barrel in 2018 against $24.2 in 2008, Kamco said in its special report ‘Gulf Cooperation Council (GCC): A Decade since the Global Financial Crisis’.
“Initiatives to shore up fiscal balances and transform economies in the GCC are now paramount as the fiscal breakeven oil price of major oil producers in the region (Saudi Arabia, Kuwait, the UAE and Qatar) are higher by 120% on average,” the report said, adding the price of Brent crude (spot) is now $82.7 a barrel compared to $35.8 during 2008.
In the case of the UAE, the fiscal breakeven has risen 206% to $71.5 during the last one decade, Saudi Arabia by 134% to $87.9, Bahrain by 42% to $113, Oman by 25% to $77.1 and Kuwait by 46% to $48.1.
Fiscal breakeven oil price is the minimum price per barrel that the country needs in order to meet its expected spending needs while balancing its budget.
Qatar’s external and fiscal balances are expected to show marked improvement this year despite the ongoing regional tension and growing emerging market stress, the US-based economic think-tank Institute of International Finance had recently said; forecasting surplus to be 3.5% of gross domestic product this year and 3.7% in 2019 compared with fiscal deficit of 2.7% in 2017.
On the capital market front, the Kamco report found that post crisis performance (April 2009 — September 2018) of Qatar was one of the best within the GCC region.
The GCC M-cap has risen from $610.8bn during 2008 to $1.03tn during 2018, the report said, adding the average company M-cap in Qatar stood at $3.34bn during 2018 compared to $1.78bn during 2008 against the GCC average of $1.46bn ($0.91bn).
In the case of Saudi Arabia, the average company M-cap amounted to $2.7bn ($1.94bn), Abu Dhabi $1.88bn ($0.96bn), Dubai $1.51bn ($1.08bn), Kuwait $0.55bn ($0.6bn), Bahrain $0.52bn ($0.32bn) and Oman $0.17bn ($0.16bn).
QNB was among the first five in the Gulf region, it said, highlighting Qatar, Abu Dhabi and Saudi Arabian bourses had seen growth in their indices.
Total banking assets in the GCC stood at $2.23tn, showing a 1.7 time growth over those during 2008 and credit facilities to residents witnessed 1.8 times growth to $1.02tn; while government/private sector deposits grew two times to $1.35tn over the ten year period.
The GCC fixed income issuance stood at $123.3bn in 2018 compared to $18bn during 2008. The GCC corporate bonds amounted to $29.7bn, corporate sukuks at $9.9bn, and government bonds at $51.7bn and sovereign sukuks at $32bn.
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