The GCC countries' growth remains robust at 4.3 per cent on the back of 'accommodative' fiscal policies and 'comfortable' oil price and production levels, Bank of America Merrill Lynch said.

Amid falling oil prices, the leading financial management and advisory company maintained that the GCC countries would have a reasonable fiscal break-even at oil price of $ 80 per barrel.

“We think the region is well positioned to cope with a global slowdown given the high level of savings, progress on corporate deleveraging, more robust banking systems and a still reasonable regional fiscal break-even oil price of $ 80 per barrel.”

The bank’s observation comes amid prediction that Brent may fall as low as $ 76 a barrel in the next six months.

“The oil price is a reflection of the market’s expectation that there will be no growth in Europe for the next few years,” said Michael Hewson, analyst at London-based CMC Markets UK. Forecasting Brent at $ 76 a barrel in the next six months, he said although Iran could provide potential for prices to move higher in the short-term, the overall outlook is down, based on the lack of economic growth.

On Friday, Brent crude for August delivery traded at $ 92.76 per barrel on the ICE Futures exchange. By early afternoon in Europe, benchmark oil for August delivery was at $ 80.50 a barrel in electronic trading on the New York Mercantile Exchange. Brent has lost 24 per cent this quarter, the steepest slide since the last three months of 2008.

According to Deutsche Bank’s calculations, break-even oil prices of both Saudi Arabia and the UAE have fallen for the first time in the past few years.

“The average break-even price in the GCC countries will edge down to about $ 80 barrels this year, the first drop since 2003,” Deutsche Bank’s Robert Burgess wrote in a note to clients.

“The improvement in break-evens is limited to Saudi Arabia and the UAE, however, where some of the large one-off increases in spending that pushed up break-evens last year are set to be unwound this year. Elsewhere in the GCC, increases in recurrent spending, partly in response to the Arab Spring, will see break-even prices continue to edge upwards,” he said.

The bank said Saudi Arabia’s break-even price has fallen from $ 82.2 to $ 78.4, while the UAE’s is more pronounced from $ 99.1 to $ 90, as fiscal pressures ease in both countries.

According to Burgess, there would be no respite for Bahrain, which will see its break-even price rise to $ 127.2 per barrel as its economy suffers due to the political fallout in the country.

“Bahrain’s position remains the most challenging in the region: oil and gas production is more or less flat, spending pressures remain high, and growth in the non-oil economy (and hence non-oil tax revenues) will remain weak... Bahrain also lacks the large backstops of oil savings that other GCC countries have, which could smooth the adjustment process,” he wrote.

Qatar’s break-even price will also jump to $ 77.9 this year from $ 70.6, but it is hardly a reason for worry given its stable natural gas revenues and a cushion of reserves.