Masood Ahmed, director of the Middle East and Central Asia Department at the IMF said that although continued spending by GCC governments during the global slowdown would “contribute substantially to global demand” and act as a stabiliser to the world economy, he still expects to see fiscal deficits of 4 per cent of GDP to emerge in the region as a result of the spending.

In previous years the fiscal surplus had risen to 12 per cent of GDP. Ahmed also said that the IMF was expecting the current account surplus to fall from around $400bn to a deficit of $30bn in 2009.

The IMF is predicting that inflation in the GCC will fall to 6.3 per cent, from 10.6 per cent in 2009. Ahmed, also warned that as further revisions to these forecasts are likely as more data emerges during the year. The latest revision is the four to be made to the IMF’s outlook in the past eight months.