The International Monetary Fund (IMF) on Wednesday (May 2nd) warned Arab states against complacency over a looming debt crisis, urging continued economic reforms despite a rise in oil prices, AFP reported.
Crude prices have rebounded in the region thanks to a deal by producers to trim production, but the IMF said such a change in fortunes should not get in the way of overhauling state spending.
"Required reforms include further steps toward full elimination of energy subsidies, and changes to pension and social security systems -- including revisions to retirement age and benefits," the IMF said in its Regional Economic Outlook for May.
Jihad Azour, director of the IMF's Middle East and Central Asia department, said higher oil prices should spur change.
"We should not be complacent... oil prices are going up. That definitely does not mean that we should not introduce the reforms. On the contrary, the current environment offers the opportunity to accelerate some of these reforms," he said.
Following the oil price slump in mid-2014, Gulf Co-operation Council (GCC) states -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE -- undertook fiscal measures and reforms to cut public spending and boost non-oil revenues.
Azour said Saudi Arabia's economic consolidation measures to cut a persistent budget deficit and diversify the economy away from oil remains the correct policy.
"The current strategy that is based on reaching a balanced budget by 2023 is the right one," he said.
