Gulf on course to post current account deficit this year

We’ve argued for some time that the Gulf economies are set to run a current account deficit this year for the first time in over a decade, and the latest plunge in oil prices means this deficit could come in at almost 10% of GDP – something not seen since the early 1990s. In spite of this, these countries’ large FX savings mean they should be able to weather a period of low oil prices relatively well. As a result, while we expect growth to slow over the coming years, it’s unlikely to collapse.