Central government deficits will fall to 5 percent of GDP, or about $80 billion, in 2021 from 10 percent of GDP, or $143 billion in 2020 RIYADH: Gulf Cooperation Council (GCC) countries’ borrowing requirements will drop sharply in 2021 as economic activity picks up, oil prices rise and governments constrain spending, according to S&P Global Ratings. Central government deficits will fall to 5 percent of GDP, or about $80 billion, in 2021 from 10 percent of GDP, or $143 billion in 2020, S&P credit analysts led by Trevor Cullinan wrote in a report. However, the relatively high levels of borrowing will still mean growing debt levels, they said. Saudi Arabia will account for about 60 percent of the cumulative $355 billion deficit across the six nations between 2021 and 2024, followed by Kuwait with 25 percent and the UAE at 7 percent, S&P said. Kuwait will register the largest deficit this year, at 20 percent of GDP, followed by Bahrain and the UAE at 6 percent, Saudi Arabia at 5 percent, Oman at 4 percent and Qatar at 1 percent. The calculations are for central government only and do not include sovereign wealth funds or state-owned enterprises. The GCC posted a smaller deficit in 2020 than in 2016 even though oil prices were lower, averaging $42 per barrel compared with $44 per barrel. The better performance was attributed to a more nimble fiscal response as well as broader sources of funding, particularly the introduction of VAT in Saudi Arabia, the UAE and Bahrain. GCC government issued a combined $70 billion of debt in 2020, compared with $90 billion in 2016 and $100 billion in 2017, S&P said. Issuance will average $50 billion a year between 2021 and 2024, it estimates. Across the region, about half of government financing needs will be met through debt issuance and half through asset drawdowns. Saudi Arabia, Bahrain and Oman will mainly finance through debt, while Abu Dhabi, Kuwait and Qatar will draw more on assets, it said.