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Fitch Ratings upgraded Oman's long-term foreign-currency rating by one notch on 25 September, taking it from BB to BB+, with a stable outlook.

Grundberg diplomacy: United Nations special envoy Hans Grundberg has been meeting senior figures around the region, in an effort to inject new momentum into the peace process. He was in Riyadh on 9 August where he met Yemeni Presidential Leadership Council (PLC) head Rashad Al-Alimi, Prime Minister Maeen Abdulmalik, foreign minister Ahmed Bin Mubarak and Saudi ambassador to Yemen Mohamed Al-Jaber. The following week, Grundberg was in Muscat for talks with Foreign Ministry undersecretary Khalifa Al-Harthy and Houthi chief negotiator Mohammed Abdel Salam.

Recent data give some grounds for optimism that Saudi Crown Prince Mohammed Bin Salman’s bets on stimulating non-oil growth and liberalising society is yielding dividends, but an IMF report and other recent analysis show just how much further the country needs to go to end its dependency on oil and gas revenues.

G20 summit: Saudi Arabia’s Crown Prince Mohammed Bin Salman was a prominent figure at the G20 summit in New Delhi on 9/10 September. He held talks with a series of other leaders, including India’s Prime Minister Narendra Modi, Argentina’s President Alberto Fernandez, Bangladesh’s Prime Minister Sheikh Hasina Wazed, Brazilian President Luiz Inácio Lula da Silva, Japan’s Prime Minister Fumio Kishida and Turkey’s President Recep Tayyip Erdoğan.

Recent gloomy reports on a downturn in Saudi economic growth were underpinned by the announcement that Riyadh was extending its 1m b/d production cut until end-2023. However, the higher prices are not enough to make up for the fall in output. 

With the Public Investment Fund (PIF) and other state-owned bodies driving many developments in the Saudi economy, the International Monetary Fund (IMF)'s annual Article IV consultation places the development of a Sovereign Asset-Liability Management (Salm) framework as "a high priority to support fiscal sustainability".  

Qatar’s ambassador to Australia Saad Abdulla Al-Mahmoud Al-Shareef and Qatar Airways executives are expected to be called to testify at an enquiry by the Australian Senate over a growing scandal around the Canberra government’s alleged protection of local flag carrier Qantas against international competition.

Among the issues raised in the International Monetary Fund (IMF)’s 2023 Article IV consultation, published in early September, were notable comments on the Saudi rial’s peg to the US dollar and measures to crack down on local and international corruption.

The UAE's early September announcement that it had set up a federal gambling regulator is a further sign of how the competition between regional economies is pushing them to diversify into areas that would previously have been regarded as too sensitive or even taboo.

The Saudi economy fell into a recession in Q2, with initial estimates pointing to a quarter-on-quarter decline of 0.1% in GDP during the period, following a 1.4% fall in Q1. While non-oil activity grew, the limits the government has imposed on oil output meant the oil sector contracted by 1.4%.

Qatari Emir Sheikh Tamim Bin Hamad Al-Thani has entered into his second decade as ruler in a strong position, having dealt with the regional blockade, the Covid pandemic and the Fifa World Cup. This leaves Qatar now in search of a new direction: while positioning itself as a regional mediator provides a focus for its multi-polar foreign policy, Doha has yet to identify a new national purpose on the domestic stage. 

Dubai economic recovery gives emirate upgrade: The number of visitors to Dubai surpassed pre-Covid levels in H1 2023, marking the vital tourism sector’s full recovery and prompting a change in GSN’s economic risk grade for the emirate, with the previous downward economic indicator removed. Data from the Department of Economy and Tourism in early August showed a record 8.55m international overnight visitors in H1 23, compared to 8.36m in H1 19.

Kuwait's National Assembly (parliament) agreed to set up a High Election Commission to supervise future elections, a role until now held by the Ministry of Interior. The commission will be run by a panel of five senior judges and be overseen by the Ministry of Justice.

Slowing growth: The UAE economy grew by 3.8% in Q1 2023, compared to Q1 22, according to Federal Centre for Competitiveness and Statistics data issued in early August. GDP was AED418.3bn ($113.9bn) in the January-March period, when non-oil GDP expanded by 4.5%.

Kuwait's Crown Prince Sheikh Mishaal Al-Ahmed Al-Jaber Al-Sabah was in London in late August to mark the 70th anniversary of the opening of the Kuwait Investment Office in London. The KIO was set up in February 1953, eight years before Kuwait gained independence from the United Kingdom, and is generally seen as the world's first sovereign wealth fund. It is now part of the Kuwait Investment Authority.