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Oman: new Sultan faces big economic challenges

The swift appointment of Haitham bin Tariq as the Sultan of Oman, following the death of Sultan Qaabos, has eased fears that the country would enter a prolonged period of political uncertainty. But the new leader faces a difficult task of securing financial support from its neighbours in order to maintain the dollar peg. At the very least fiscal austerity will need to continue and we think that it will be the Gulf’s worst performing economy over the next couple of years.
Jason Tuvey Senior Emerging Markets Economist
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Middle East Economics Weekly

Tunisia rate hike, Saudi budget data, Egypt privatisations

Tunisia’s central bank hiked interest rates this week with policymakers almost certainly having one eye on the country’s fragile external position. But we do not think that this will prevent sharp falls in the dinar and, in turn, a sovereign default. Elsewhere, Saudi Arabia posted its largest budget surplus since 2013 in Q1 on the back of high oil prices and continued tight fiscal policy. If oil prices remain high, though, the proverbial purse strings are likely to be loosened, supporting activity in the non-oil sector. Finally, more details emerged of Egypt’s forthcoming privatisation drive with the government planning to remove itself from a whole swathe of sectors.

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Middle East Economics Update

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More from Jason Tuvey

Emerging Europe Economics Weekly

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