GULF WEEKLY: Saudi deficit hit $78bn, GDP data for UAE & Kuwait, Covid gets political in Kuwait
A skimmable summary overlaid with our analysis and links. Headlines include:
* Saudi Arabia’s deficit more than doubled to $78bn despite above-budget non-oil revenue.
* Spending was up by 2% y/y due to Covid, but salaries and capex were cut in line with plans.
* Saudi Arabia lifted most Covid restrictions, will restart flights in May and announced stimulus for the pilgrimage sector.
* UAE non-oil GDP contracted by -9.5% y/y in Q2, similar to Qatar, but only half of Dubai’s decline.
* Kuwait’s non-oil GDP rebounded strongly in Q3 but was still down by -7.7% y/y due to weak manufacturing.
* Kuwait’s parliamentary budget committee is pushing for contributions from state-owned enterprises to pay salaries, but the finance minister again said bond issuance was needed.
* Violations of Covid restrictions have been politicized in the latest clash between Kuwait’s government and opposition MPs, raising concerns parliament could be dissolved.
* Qatar restored ties with Yemen and exported condensate to Dubai but was criticized by Bahrain over an Al Jazeera program about abuses in a jail.
* The Oman Economic Stimulus Plan includes targeted tax reductions of less than $200m.
* Bahrain issued $530m in 6-year local bonds at 4%.
* Libya’s parliament approved the interim government, and Jordan reshuffled its cabinet.
Cross-cutting themes
Oil
* OPEC revised up its demand forecast for this year by 200k b/d (WSJ), which helped oil rebound back towards $70. It briefly hit $71 on Monday after the attacks on Saudi’s Ras Tanura oil port, although it was undamaged.
* Russia’s foreign minister, Sergei Lavrov, visited Saudi Arabia and said the two countries are aligned on energy policy and will remain so for the long-term.
* Our Mar 9 note looked at the possibility that some Gulf states could post surpluses this year if the most bullish oil forecasts proved correct, although we are not so optimistic.
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