- Oil dipped after Israeli strikes on Iran did not target oil facilities.
- The IMF forecasts fiscal breakeven oil prices for 2025 from $45 for Qatar to $125 for Bahrain. [see (1) below and graph]
- The GCC signed a rare FTA with New Zealand, a month after a UAE bilateral Cepa. [see (2) below]
- The flash Saudi GDP for Q3 returned to overall growth but the non-oil sector slowed slightly.
- The Saudi current surplus narrowed to 1.6% of GDP in Q2 on weaker investment income.
- Saudi Arabia raised $6bn in syndicated loans to settle Binladin Group debts.
- PIF deals at FII, including with Hong Kong and Brookfield, were focused on domestic investment.
- Dubai’s budget sees continued surpluses in 2025-27, averaging just under 2% of GDP.
- S&P thinks Dubai’s real estate sector isn’t heading for an imminent correction, despite a surge in supply.
- The UAE signed a Cepa with Vietnam and a major investment in VinFast is being discussed.
- Masdar completed a pilot making steel with hydrogen but pushed back its green hydrogen target.
- QatarEnergy is investing alongside Total in a 1.25GW solar power project in Iraq.
- Vale and Jinnan Steel announced a $600m investment in an iron plant in Oman’s Sohar freezone.
- Mumtalakat is selling McLaren’s auto business to Abu Dhabi’s CYVN, a year after PIF divested.
- In Lebanon, Hezbollah named a new leader (Naim Qassem) and the US proposed a 60-day ceasefire.
- The assault on northern Gaza included a strike that killed 93 people. Israel controversially banned UNRWA.
These headlines are taken from a 4,500-word report from my economic research service with GlobalSource Partners, a leading source of independent emerging market intelligence. Click on any report to get guest access and contact me or GlobalSource’s sales team for more information about the service, which also includes the most extensive comparative Databank of GCC economic data available (updated weekly) and direct analytical support. Clients include banks, asset managers and governments spanning the GCC, Asia, Europe and the Americas.
Here are two brief samples from the report:
(1) The IMF updated its non-oil growth and fiscal breakeven forecasts
- The IMF Regional Economic Outlook provides forecasts of additional indicators that are specific to the region, supplementing last week’s WEO report that included standardized indicators forecast for all countries globally.
- Non-oil growth was revised up sharply this year for the UAE to 5.7% (on par with Abu Dhabi’s H1 outturn) and for Oman to 3.2%, and both also had smaller upward revisions for 2025. However, forecasts for most other Gulf states were revised down in both years, with Saudi Arabia’s cut to a still-strong 4.4% in 2025 (from 5.3% previously).
- Oil growth was revised down for all states this year, due mainly to delayed OPEC+ tapering, and for most of them in 2025. However, the UAE’s 2025 growth was revised up to 6.7%, which fits with the additional 300k b/d baseline allocation it received for next year in the June OPEC+ meeting.
- Fiscal breakeven oil prices (the price that would balance the budget) were revised up for most states compared with the April forecast (the UAE is a notable exception). However, positively, most breakevens are at least lower in 2025 than in?2024, partly due to higher OPEC+ oil production quotas. They range from just $45 for Qatar to $125 for Bahrain.
(2) The GCC signs an FTA with New Zealand
- New Zealand said that the FTA was the “highest quality deal the GCC has done to date” and includes lifting 51% of tariffs on day one and 99% over ten years (NZ).
- Although New Zealand is not a major trade partner, with only $1.8bn in annual trade with the Gulf, the deal is significant as the second GCC FTA in a year, following one signed with Pakistan, following a long fallow period in 2009-22. Trade talks with New Zealand began nearly two decades ago but then stalled for many years before being restarted recently.
- This comes a month after the UAE signed a bilateral Cepa with New Zealand, which New Zealand described as being complementary. This suggests that the Cepa process is not a barrier to regional FTAs.
- The deal increases hope of progress with other GCC trade deals that are under negotiation, including with the UK, Turkey and Indonesia.
- Meanwhile, The UAE signed a Cepa with Vietnam, its 13th trade deal in two years. Bilateral trade was $5bn in 2023 (Rt).
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