International Monetary Fund cautioned Middle East's oil exporting Gulf States to adapt their budgets and make rapid reforms to cut spending due to lower oil prices, in a regional report on Tuesday.
"Delaying such reforms will most likely require a more abrupt and costly adjustment in the future," the global lender said.
The impact of low oil prices are expected to be reduced "by using accumulated financial buffers" while implementing the necessary fiscal measures, according to the IMF.
The IMF also cut its growth forecast for Gulf countries from 3.6 to 3.4 compared to a year earlier.
According to the IMF, fiscal balances of Gulf Cooperation Council, GCC, countries, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - United Arab Emirates are also estimated to deteriorate, while a surplus of 4.5 percent of their GDP could turn into an 8 percent deficit.
"In the GCC, a combined budget surplus for 2014 of $76 billion is expected to turn into a deficit of $113 billion," the report said.
The oil prices has more than halved between June last year and January 2015, while bouncing back from a $45 per barrel low to around $66 per barrel; the highest this year.
By Furkan Naci Top
Anadolu Agency
furkan.top@aa.com.tr