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Gulf to rely on austerity rather than devaluations

The collapse in oil prices has led to renewed pressure on dollar pegs in the Gulf and, while there could be some positive effects on balance sheets from devaluations, the costs would be politically unpalatable. The upshot is that we think that policymakers will rely, once again, on a period of fiscal consolidation to make the adjustment to cheap oil.
Jason Tuvey Senior Emerging Markets Economist
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Turkey Consumer Prices (May)

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