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Fiscal deficits squeezing investment in resource-poor economies

With all eyes on Egypt’s currency crisis, it’s easy to forget the fiscal crisis hitting the resource-poor Arab countries at the same time. Gaping budget deficits are squeezing out investment and damaging the region’s productive capacity. Fiscal consolidation will, therefore, be necessary to realise the region’s long-run growth potential – which we still think is among the best in the emerging world.

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