One of the main channels through which the Gulf countries are exposed to worries about the health of the global banking system in through energy markets, with the price of Brent crude falling by 13% so far this month. If prices were to stay at current levels for the remainder of the year, most Gulf countries would still be running budget and current account surpluses with the exception of the two smallest economies, Oman and Bahrain. Even so, lower hydrocarbon revenues could scupper plans to loosen fiscal policy to support non-hydrocarbon sectors, providing less of a buffer from the blow being delivered to GDP growth this year from oil production cuts.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services