Weekly GCC news to 24 May

• Gulf ministers and Qatar’s Emir attended Raisi’s funeral and Iran set elections for June 28. [see (1) below]
• The ICJ demanded a half to the Rafah offensive and the ICC proposed charges for Israeli and Hamas officials.
• King Salman’s health is reportedly stable after he received treatment for a lung infection.
• Goldman Sachs is the first US bank to receive a license to establish a regional HQ in Riyadh.
• The UAE achieved 6.2% non-oil GDP growth in 2023, led by finance, transport and construction.
• Fitch upgraded Ras al-Khaimah to A+, despite higher (but temporary) deficit forecasts. [see (2) below]
• S&P raised its deficit forecasts for Sharjah and sees debt reaching 60% of GDP in 2027.
• Adnoc invested in LNG projects in Texas and Mozambique and sold $1bn in Adnoc Drilling stock.
• The IMF completed Article IV missions to the UAE and Qatar, with brief positive assessments.
• Qatar’s fiscal surplus was 1% of GDP in Q1 as expenditure rose by 5% y/y.
• Qatar issued its $2.5bn in debut green bonds, its first debt since 2020, which priced tightly.
• The lead contractor on Qatar’s Golden Pass LNG in Texas filed for bankruptcy, a year before start up.
• Moody’s revised up its deficit forecasts for Kuwait but doesn’t see debt issuance before 2026.
• Oman’s tax revenue from goods and services rose by 8% y/y in Q1, but customs duties dipped.
• Moody’s doubled its deficit forecasts for Bahrain and sees debt rising to 143% of GDP in 2025.
• Russia’s Nornickel is planning a platinum refinery in Bahrain, announced as the King visited Moscow.

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Here are two brief snippets from the report:

(1) Gulf officials attend Raisi's funeral

• Qatar’s Emir and the foreign ministers of Saudi Arabia, the UAE, Kuwait and Bahrain attended, in a signal of the improvement in regional relations over the last few years (Rt).
• Of most note was the foreign minister of Bahrain, which has long been the most strident critic of Iran in the region, accusing it in the past of financing opposition and even terrorist groups in the Kingdom. King Hamad said in a meeting with Putin in Moscow that there is no reason to postpone the restoration of diplomatic relations with Iran (Rt, NB).
• Oman's foreign minister was not present, probably because of a clash with a scheduled visit by the Sultan to Jordan, but this was no reflection of bilateral relations with Iran, which are good, and a group of Oman ministers and officials attended (OT).
• The main development over the last few days within Iran is that a very short timeframe was set for the presidential election on 28 June, 10 days sooner than is constitutionally required. Given the period of mourning this week, the requirement that candidates must be vetted by the Guardian Council and the upcoming Eid al-Adha holiday on around 16 June, there will be very little time for campaigning. This reinforces the likelihood of very limited options to facilitate a handpicked hardliner, but this also risks an embarrassingly low turnout. No candidates have been announced yet.
• There have been lots of think tank notes and events on Iran this week, including from: Crisis Group, MECGA, ACDC, GIF, Baker, USIP, CFR, FP, WINEP.

(2) Ras al-Khaimah upgraded

• Fitch upgraded Ras al-Khaimah, one of the smaller UAE emirates, to A+. This is Fitch’s first rating action since initiating coverage of RAK in 2008. It is now two notches ahead of S&P, which placed the emirate's A- rating on a Positive outlook in October.
• The rationale for the upgrade was a combination of stronger revenue and growth prospects, including as a result of the development of the Wynn Resort on al-Marjan Island, set to be the UAE's first gambling destination, as well as more recently announced development projects for RAK Central and Beach District.
• There was a fiscal surplus of 3% of GDP in 2023, well ahead of Fitch's forecast for a small deficit. The costs of the development projects will boost expenditure over the next few years and so Fitch expects a deficit averaging -2.3% of GDP in 2024-25, more than previously forecast. However, as the spending is on a productive investment and is well within the emirate’s capacity to finance from its deposits (currently 15.5% of GDP), Fitch was not worried.
• The $1bn sukuk (equivalent to 7% GDP), its only public debt security in issuance, is expected to be fully refinanced when it matures next year.