GULF WEEKLY: Oil spikes with Iran-Israel conflict, Saudi fiscal forecasts revised, Oman gets another rating upgrade, Abu Dhabi’s GDP rebounds in Q2

GULF COUNTRIES - Report 04 Oct 2024 by Justin Alexander

A skimmable summary overlaid with our analysis and links. Headlines:

* Oil has spiked by 9% to $78 amidst concerns about a widening Israel-Iran conflict.
* Saudi Arabia revised down growth and fiscal forecasts, seeing deficits of -2.8% of GDP in 2024-27.
* The Saudi PMI rebounded to the highest since May; Kuwait’s returned to mild expansion; the UAE’s dipped slightly.
* Saudi FDI was disappointingly flat at 1.1% of GDP in Q2, but unemployment fell to a record low of 7.1%.
* Construction restarted after seven years on a 1km tower in Jeddah, set to be the world’s tallest.
* Abu Dhabi’s non-GDP growth rebounded to 6.6% y/y in Q2, led by construction, finance and transport.
* Adnoc finalized a €11.7bn deal to buy German chemicals firm Covestro.
* Qatar Airways is seeking to buy 25% of Virgin Australia, filling a gap in its associate network.
* Qatar’s current account surplus rose to 18% of GDP in Q2; Oman’s narrowed to 2.6% in 2023.
* S&P upgraded Oman to BBB-, its first investment grade rating since 2019.
* Oman Future Fund unveiled its first round of investments, totaling $0.6bn, including in a solar plant.
* Bahrain’s FX reserves rebounded in August to the highest in a year, and its current account surplus widened in Q2 to 5.7% of GDP.
* Iran launched 180 missiles at Israeli airbases and Mossad; the amount of damage is disputed.
* This came after Israel killed Hezbollah’s leader and invaded southern Lebanon, with 1.2m displaced.
* Airstrikes on Gaza and Yemen continued, and the first in the West Bank for over 20 years killed 18.
* GCC foreign ministers, meeting in Qatar, called for ceasefires and met with Iranian officials.
* Databank updates: Saudi fiscal; Abu Dhabi GDP; Oman, Bahrain & Qatar current accounts; Oman and Saudi forecasts.

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