ID :
375649
Wed, 07/29/2015 - 13:28
Auther :

Removal Of Fuel Subsidies In UAE Will Strengthen Its Fiscal Position

KUALA LUMPUR, July 29 (Bernama) -- The removal of fuel subsidies in the United Arab Emirates (UAE) will help strengthen that country’s fiscal position, given the fact that it represents a large portion of its annual fiscal spending. Credit rating agency, RAM Ratings Services Bhd, has rated the UAE with gAA2(pi)/Stable and seaAAA(pi)/Stable). It said UAE’s petroleum subsidy bill was substantial, amounting to an estimated 26 billion United Arab Emirates dirham, which was 6.6 per cent of revenue or 1.7 per cent of its Gross Domestic Product (GDP). "Oil prices were on a downtrend since the second half of last year with Brent crude oil prices currently at US$53 per barrel, placing the UAE’s fiscal position under pressure as over 70 per cent of government revenue was generated by oil and gas-related activities," it said. RAM Ratings also said savings from the spending cut would help narrow the fiscal deficit, expected this year, to 1.9 per cent of GDP from the initial estimation of 2.9 per cent of GDP. "The subsidy removal is a bold move to strengthen government finances and UAE is the first country in the Gulf Cooperation Council region to effect a complete removal of fuel subsidies," it added. -- BERNAMA

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