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GSN Risk Grade: C↑3↓ Fiscal balance: Finance and national economy minister Sheikh Salman Bin Khalifa Al-Khalifa insisted on 9 May that the government’s fiscal balance programme was on track to hit its target of balancing revenues and expenditure by 2024.

Risk Management Report: International politics and economics. Breakeven prices: Oil prices have remained high in the shadow of the Ukraine war, with the cost of a barrel well above $100 through much of March and April. This means that most Gulf states are in a position to post budget surpluses this year.

Muscat expects to launch a personal income tax in the first half of 2023, according to an unnamed official at the National Programme for Fiscal Balance cited by Al-Monitor on 22 April.

Moody’s Investors Service improved its outlook on Bahrain’s sovereign rating from negative to stable on 22 April, citing higher oil prices which have improved the government’s fiscal position.

Risk Grade – A1 Economic growth: The federal economy grew by 3.8% to AED1.49trn ($406bn) in 2021 – which was well ahead of the 2.5% predicted by local bank Emirates NBD.

Budget balances remain difficult, but Sultan Haitham’s efforts to cope with fiscal pressures, Covid-19 and other economic challenges have helped an under-pressure economy to make some progress over the past year.

GSN Risk Grade: B↑1 Recent developments- Doha Forum: Numerous international dignitaries visited the Doha Forum, which ran from 26-27 March at the Doha Sheraton. Among those to attend were...

GSN Risk Grade: B↓2↓ Recent developments- Economic upgrade: Doubts persist over the extent to which Crown Prince Mohammed Bin Salman’s Vision 2030 projects are being implemented to a level that can genuinely overhaul the job prospects and living standards of the kingdom’s young population.

The UAE’s addition to the Financial Action Task Force (FATF)’s ‘grey list’, and other governance issues focused on Dubai, points to pressures on the Emirates’ authorities. This could become more intense as international pressure grows to fall into line over Russia’s invasion of Ukraine; concerted plans for domination in sectors such as tourism and transport are threatened by commercial fallout from a changing global environment.

Russia’s invasion of Ukraine has sent already strong oil prices spiralling upwards, with a show of Opec+ solidarity that underlines just how close Saudi-Russian relations have become. Oil and gas producers are among the likely big winners, with Gulf governments offered a new path to balance their budgets and build up their financial reserves, but other commercial relations could come under much closer scrutiny.

GSN Risk Grade: D4↓ Recent developments- Kuwaiti compensation: The UN Security Council (UNSC) voted unanimously on 22 February to end compensation payments from Iraq to victims of the 1990 invasion of Kuwait. Iraq has paid $52.4bn to 1.5m claimants since the system was set up in April 1991.

Kuwait’s political problems have caught up once more with its economic profile as Fitch Ratings downgraded long-term foreign currency issuer default rating.

The UAE federal authorities are to impose a 9% corporation tax on the profits of all onshore companies from June 2023, including on businesses owned by local nationals. However, free zone companies will be exempt.

Government revenues for the first ten months of 2021 were up 28% year-on-year to OR8.3bn ($21.6bn), while spending was broadly flat at OR9.3bn, according to Ministry of Finance data released in early December. The key factor was higher oil and gas prices with oil revenues up 35% compared to last year, to OR4.4bn, and gas revenues rising 51% to OR1.7bn.

GSN Risk Grade – B↓2↓ Economic growth: Initial figures show the economy expanded by 5.8% in Q3 2021, compared to the previous quarter, the fastest rate of growth for more than a decade. Gross domestic product is up 6.8% year-on-year and 1.6% above the pre-Covid-19 pandemic level. The oil sector has been a key contributor to recent growth: crude production reached 9.76m b/d in October, the highest level since April 2020, according to Capital Economics.