- Current account surpluses rose in Q1 in Qatar (15% of GDP) and KSA (3%) but eased in Bahrain (5%).
- Inward FDI remained weak in KSA (1% of GDP), fell in Bahrain (to 2%), and turned negative in Qatar. [see (1) below]
- Qatar’s PMI surged in June to 55.9, but in other Gulf states' PMIs eased.
- Most Gulf states ranked highly in an index of best countries for expats, with KSA rising strongly. [see (2) below]
- Saudi unemployment fell to a record low of 7.6%, even with higher labor force participation.
- PIF’s assets rose by 26% in 2023, including a recovery in cash, and it returned to profitability.
- Aramco awarded $25bn in gas contracts related to the Jafurah project.
- The UAE fiscal surplus remained strong at 5% of GDP in Q1.
- Sharjah issued a AED1bn 5-year sukuk.
- DIFC announced office space expansion plans and ADGM is near full occupancy.
- Qatar Airways profits soared by 39% to a record $1.7bn.
- Kuwait’s finance minister promised subsidy reform as the budget was belatedly approved.
- Oman continued to debate the draft personal income tax law.
- Israel is sending negotiators back to Qatar as the US talks up the prospect of a Gaza ceasefire breakthrough with Hamas.
- Egypt appointed a new cabinet, including Ahmed Kouchouk as finance minister.
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Here are two brief snippets from the report:
(1) Saudi, Bahrain and Qatar see weak inward FDI in Q1
- Quarterly balance of payments data was released for three states this week - Saudi Arabia, Qatar and Bahrain (and is pending for Kuwait; Oman and the UAE only publish annual data). This includes insights on trade, services, portfolio investment and other cross-border flows of money.
- One of the most closely watched lines is inwards FDI, which covers a range of transactions from investments in greenfield projects to large equity investments (>10%) and related flows.
- Saudi Arabia has been working hard to catalyze FDI as one of the drivers of its Vision 2030 diversification agenda. It is aiming to reach 5.7% of GDP by 2030 and 2.9% this year, however, Q1 was weak, with the net inward flows of just 0.9% of quarterly GDP, the lowest in a year (GAS
).
- Bahrain has had strong FDI in recent years, particularly last year when it soared to 15% of GDP, largely as a result of Kuwait Finance House's acquisition of Bahrain's Ahli United Bank. It fell sharply in Q1 to 2.0% of GDP, the weakest in nearly two years (CBB
).
- Qatar meanwhile saw negative inward FDI. This means that outflows from things like divestments or depreciation exceed new inflows. It has been negatives in most quarters in recent years, but is expected to turn positive soon as a result of equity inflows related to the North Field LNG expansion (QCB
).
(2) Gulf states ranked highly by expats
- The annual Internations
Expat Insider survey assesses 53 countries around the world that attract large numbers of expatriate migrant workers.
- The UAE advanced by one place to enter the top 10 and Oman remained highly ranked at 12.
- Saudi Arabia and Qatar were among the strongest improvers globally, with both advancing into the top 20.
- However, Bahrain fell sharply from 9th, the best ranked in the region last year, to 33rd, second worst behind Kuwait which remained the bottom-placed country globally for the seventh consecutive year.
