​GULF WEEKLY: Kuwait ends RFFG transfers, Saudi inflation spikes, US pushes for sanctions snapback

GULF COUNTRIES - Report 21 Aug 2020 by Rory Fyfe and Justin Alexander

A skimmable summary of key developments overlaid with our analysis and links to further information. Headlines include:

* Oman saw the biggest government restructuring in a decade.
* Kuwait’s parliament suspended revenue transfers to the RFFG but kicked back a vote on the debt law for two weeks, as liquid reserve assets fell to just three-months salary cover.
* Kuwait’s 2019/20 deficit (pre-transfers) tripled to $12.8bn, even before the oil price crash.
* Saudi inflation jumped by 6% m/m in July as a result of the VAT hike.
* Concerns are growing in the US about an undeclared Saudi nuclear program.
* UAE coastguards killed Iranian fishermen but the situation is unlikely to escalate.
* There was controversy over a UAE bid to buy F-35 jets after its normalization with Israel.
* UAE non-oil GDP contracted by -1.9% y/y in Q1 (less than the -3.5% in Dubai alone).
* The US failed to extend UN arms sanctions on Iran so is pushing for a broader snapback.
* Libya’s government announced a ceasefire that could lead to a resumption in oil exports.
* The Lebanon tribunal verdict on Hariri was less damaging than expected for Hezbollah.

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