| Feiler predicts GCC financial meltdown in 2009 January 18 2009 |
| Dr. Gil Feiler, CEO of Info Prod Research (Middle East), predicts that by the end of 2009 the total value of the foreign assets of GCC governments and banks will total less than $690 billion. Feiler noted that this figure will represent a decline of 35-40 percent compared to the year end of 2008. The GCC governments will have to lower their foreign assets reserves since the spending level of the GCC governments will continue to be high while the oil income won\'t follow suit and the price will average, according to Dr. Feiler, at around $50 pb. Dr. Feiler added that the GCC governments already committed circa $2.7 trillion worth of investments for the next decade, and with lower oil price and income the GCC governments won\'t be able to direct a lot of funds into their reserve and wealth management funds. Dr. Feiler estimated the total oil income of the GCC countries for 2008 at $555 billion and he predicts a sharp decline to less than $375 billion during 2009. At the same time, according to Dr. Feiler GCC\'s fiscal position would deteriorate sharply, most governments will run fiscal deficits and the total GCC\'s external debt will reach to at least $420 billion by the end of 2009. As for the banking sector, Feiler said major banks in the GCC have defaulted on its debt and major banks saw their ratings outlook downgraded, including Taib Bank, Gulf International Bank and BBK. |
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