Any GCC efforts to curtail spending in the face of low oil prices are likely to start with cutting capital expenditure on non-strategic investment projects, according to US ratings company, Moody’s Investors Service.

“Reining back capital expenditure on non-strategic investment projects is likely to be the first step,” said Alastair Wilson, managing director of the Moody’s Global Sovereign Risk group.

Spending on public wages, benefits and subsidies will be more difficult for the GCC nations to cut, according to Wilson.

“Low-hanging fruit may be grasped, but quick and deep reforms are unlikely,” he said.

Moody’s is expecting the GCC nations to sustain high spending in its base-case scenario, due to large fiscal buffers the countries have built up over the past decade, but says if oil prices stay very low for a long time, the region’s finances would be weakened.

“There is a lot of fiscal strength in the region… but fiscal strength is something that can evaporate very quickly,” said Wilson.

Within the GCC, Oman and Bahrain are under the most pressure to cut spending, due to their smaller financial reserves.

Bahrain’s sovereign wealth fund (SWF) assets are the equivalent of just over 14 months of government spending and Oman’s SWF assets are worth 20 months of spending, according to Moody’s data.

Saudi Arabia’s reserves are the equivalent of nearly 22 months of spending, while Kuwait’s SWF is the equivalent of more than seven years.