Recent comments from the IMF and ratings agencies have put the focus back on the weak balance sheets of the Gulf’s two smallest economies, Bahrain and Oman. We have warned for some time that both countries faced a sizeable adjustment to low oil prices and, while the worst fears of devaluations are unlikely to materialise, fiscal austerity will need to be stepped up. The upshot is that we expect economic growth to be weaker than most expect over the coming years.
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