Oil-rich states well prepared to face the global crisis

The drop in PMIs in Saudi Arabia and the UAE provide the first signs that the Gulf States are being hit by the on-going problems in the developed world. But the oil-rich countries have strong balance sheets and will be able to maintain stimulus spending despite a drop in oil prices. The Gulf should therefore avoid a sharp slowdown. By contrast, the outlook for the resource-poor economies, particularly in Egypt, has worsened. Indeed, we think that some are likely to require external assistance soon.