The drop in PMIs in Saudi Arabia and the UAE provide the first signs that the Gulf States are being hit by the on-going problems in the developed world. But the oil-rich countries have strong balance sheets and will be able to maintain stimulus spending despite a drop in oil prices. The Gulf should therefore avoid a sharp slowdown. By contrast, the outlook for the resource-poor economies, particularly in Egypt, has worsened. Indeed, we think that some are likely to require external assistance soon.
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