Saudi austerity, Arabtec liquidation, Lebanese politics

Saudi’s preliminary 2021 budget showed that, with oil prices likely to stay low, fiscal austerity is here to stay and this will act as a key headwind to the economic recovery. Elsewhere, the collapse of the region’s largest construction firm, Arabtec, adds to signs of the economic pain that the coronavirus crisis has inflicted upon Dubai and reinforces our concerns over the ability of the Emirate’s government-related entities to service their debts. Meanwhile, Lebanon’s political crisis continues to drag on and a government looks no closer to being formed. This risks an even messier outcome to the current crisis.