After a stellar performance for most of 2022, the Gulf economies are slowing. Primarily, that has reflected the impact of oil production cuts agreed with the rest of OPEC+ which is weighing on growth in oil sectors. And in the UAE and Qatar at least, the end of recent major events in both countries has contributed to weakness in non-oil sectors. Nonetheless, so long as oil prices remain high over 2023-24 as we expect, governments will have plenty of scope to keep fiscal policy loose. And, so far, the backdrop of high oil prices is supporting credit growth in the face of tighter monetary conditions. The upshot is that we expect non-oil sectors to hold up well and cushion the slowdown in overall GDP growth this year.
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