GULF WEEKLY: Oil drops to six-month low despite conflict risks, Saudi Arabia’s deficit rises but so does non-oil GDP growth, Oman plans LNG expansion
A skimmable summary overlaid with our analysis and links. Headlines:
* Brent crude dropped to a six-month low of $77 as demand fears outstrip conflict risks.
* There was momentum in GCC FTA talks, including with Turkey, the UK and Indonesia. The UAE also advanced more CEPAs.
* The Saudi Q2 deficit was -1.4% of GDP as revenue rose by 12% y/y but expenditure by 15%.
* The flash Saudi Q2 GDP showed 4.4% growth in private non-oil activities, the strongest in a year.
* PIF signed MoUs for up to $50bn in financing from 6 Chinese banks and export credit agencies.
* Saudi Arabia published its World Cup 2034 bid, with plans for 15 stadiums across 5 cities.
* Abu Dhabi’s GDP grew by 3.3% in Q1, as the only GCC state with oil growth, plus the second highest non-oil growth.
* Moody's narrowed its deficit forecast for Sharjah, including to -6.7% of GDP this year.
* The UAE awarded its first gambling license, for a national lottery, to local company The Game.
* Qatar’s fiscal surplus rose to 1.1% of GDP, and expenditure declined by -2% y/y.
* Qatar may be considering an intervention to support banks with impaired real estate loans.
* Two Kuwaiti Islamic banks, Boubyan and Gulf, are considering a $54bn merger.
* Oman LNG announced plans to build a new train, boosting its capacity by a third.
* Bahrain issued a $397 local currency 3-year bond with strong demand.
* The IMF executive board approved the third review of Egypt’s extended fund facility.
* The region braced for retaliation by Hezbollah, Hamas and Iran after Israeli assassinations.
* Databank updates: Saudi and Qatar fiscal, Abu Dhabi and Saudi GDP, Sharjah forecasts, Inflation (Bahrain, Qatar, Abu Dhabi).
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