The rally in oil prices has opened the door for some of the larger Gulf economies to loosen fiscal policy, but governments in Bahrain and Oman will need to continue tightening to repair their dire balance sheets. Even with further fiscal consolidation, we think that both countries will need to turn back to the rest of the Gulf for further financial support to help service their large external debts and keep dollar pegs intact.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services