Oil at $50 a barrel is a “gift to the world” as prices should be low enough to spur economic growth, explained Ali Al Mansoori head of Abu Dhabi’s Department of Economic Development, in an interview with Bloomberg.
Prices will probably be at $60 next year, after hitting bottom at $45, he said, adding: “Would we like for oil to stay at $50? Absolutely not. We would like oil to go to $70, $80, but beyond that I think it would hurt the economic growth.”
Oil at $50 to $60 a barrel is a “win-win situation” because it benefits consumers and producers alike, Al Mansoori said. For buyers, “it’s an opportunity for them now to use it as much as possible to set up their policies for economic growth in the next five years because ultimately the commodity is scarce.”
Zawya quoted Al Mansoori as saying that “We could see a pick-up in China and some other parts of the world”.
As for his own country’s economic situation, he said that the UAE had substantial funds that were invested internationally, and said returns on these investments would make up for fluctuations in oil prices.
According to Reuters the UAE’s cabinet has just approved a slightly smaller federal budget for 2016, reportedly due to the pressure to cut expenditures thanks to low oil prices.
Next year’s budget was set at $13.2 b with a zero deficit, lower than the previous year.
The UAE federal budget traditionally accounts for around 14% of total fiscal spending in the country.