The Gulf economies are on course to outperform the rest of the region over the next year or so. Admittedly, weak oil production will act as a drag on growth in 2013. But increased government spending should help to offset this. We have pencilled in growth of 3.0% in the Gulf economies as a whole in 2013, which is close to their historical trend. By contrast, the region’s resource-poor economies are set for another tough year. Heightened political tensions and substantial external financing risks mean that growth will remain extremely sluggish. We have pencilled in growth of 2.0% this year, well below their potential growth of 5% or more. And Egypt looks set to spend the next six months or so on the cusp of a full-blown economic and financial crisis.
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