Drop in oil prices keeps Bahrain in the spotlight

The recent tumble in oil prices has raised the pressure on Bahrain to secure financial support from the rest of the Gulf and for the government to outline its fiscal consolidation plans. We still think that the dollar peg will remain intact, but growth is likely to be weaker than most anticipate over the coming years. Elsewhere, Egypt’s privatisation plans did little to allay concerns that the government is shying away from bolder economic reforms.