- The ICJ made a provisional ruling on Gaza and the EU criticized Netanyahu’s rejection of a Palestinian state.
- Progress on a ceasefire and hostage release deal was shaken by Netanyahu’s criticism of Qatar.
- US-Houthi clashes continued around Yemen, but Aramco is continuing to ship oil through the area.
- Gulf states scored well on innovation but not on sustainability in the WEF’s Future of Growth report. [see (1) below and the graph above]
- Gulf states are showing good progress in statistical data provision, according to the World Bank.
- The Public Investment Fund sold $5bn in 5 to 30-year bonds.
- An alcohol shop is opening in Saudi Arabia, for diplomats who could previously buy from embassies.
- Dubai’s GDP grew by about 3.5% in Q3, led by hospitality, but retail and construction were weak.
- Adnoc is hiking investments in low-carbon projects by 50% to $23bn by 2030.
- Moody’s upgraded Qatar to Aa2, seeing surpluses of 4.5% of GDP over five years and falling debt. [see (2) below]
- Kuwait’s new prime minister has also been appointed as Deputy Amir, an unprecedented move.
- Kuwait said it had foiled an ISIS plot to attack Shia mosques.
- The IMF’s Oman Article IV has a positive tone and forecasts for fiscal surpluses and non-oil growth. [The full A4 report should be published soon and I'm looking forward to discussing it next week with mission chief Cesar Serra and
Tim Callen
at the Arab Gulf States Institute in Washington on Thursday 1 February, 12.30 ET - details for attending in person or online are here].
- Oman rebased its CPI to 2018 prices, giving more weight to housing over food and transport.
- 1.3m Omanis have already registered for social protection benefits, representing about ? of the scheme's budgeted cost.
- Bahrain’s Shura Council discussed the remittance tax proposal and the Representative Council discussed corporate zakat.
These headlines are taken from a 4,600-word report from my economic research service with GlobalSource Partners, Inc. , a leading source of independent emerging market intelligence. Click on any report to get guest access to it and a few other samples and message me for more information about subscribing to the service, which also includes an extensive GCC Databank, updated weekly.
Here are two brief snippets from the report:
(1) The graph shown is from the World Economic Forum’s new Future of Growth report:
- This provides a set of indices to compare countries in the dimensions of innovation, resilience, inclusion and sustainability. The four pillars draw on 84 indicators, for example: patent applications, gender parity in the labor force, renewable energy share and banking system default risk. The idea is to shed light on the quality of economic growth, not merely its magnitude, a concept that has been attempted by many indices in the past (e.g. the Happy Planet Index). The report covers most major economies, although surprisingly China is not included (no explanation is given for this omission).
- The GCC average outperforms the global average by 7 points (out of 100) in invocation and 3 points in resilience and is on par with the average for inclusiveness. Unsurprisingly, it lags by -11 points on sustainability.
- Within the region, the UAE and Qatar are the strongest performers and Saudi Arabia is also above the global average, while Kuwait lags across all indicators and Bahrain lags in all except innovation. Oman is broadly in line with the global average performance.
- As this is a new report, there is no time series yet to look at the changes over time, although there is good reason to think most of the Gulf states are on an upward trajectory across these indicators.
(2) Moody’s upgraded Qatar back to Aa2, the highest in the Gulf and on par with Abu Dhabi:
- It is the last of the rating agencies to reverse a wave of downgrades in 2017 related to banking external liabilities and the start of a four-year rift with Gulf neighbors (now resolved). Moody's had put Qatar on a positive outlook in November 2022.
- It attributed the upgrade to a significant improvement in Qatar’s debt burden and affordability metrics and an expected 4.5% of GDP fiscal surplus over the next five years, bringing debt down to 30% of GDP by 2028, from a peak of 73% in 2020. [Qatar doesn't need to issue new debt, although at Davos the finance minister said that a long-mooted green bond would be coming "very soon"].
- It expects current expenditure to rise broadly in line with non-hydrocarbon GDP and notes the government’s “solid record of fiscal policy effectiveness, which has been demonstrated through fiscal spending restraint in the face of the revenue windfall during 2022-23”.
- It estimates that the QIA’s assets are around 200% of GDP, the majority of which is invested abroad and liquid.
- A credit opinion with more detail, including its full forecasts, should be published next week.
