Oil producers adjusting to new reality

The collapse of oil prices since mid-2014 has exposed the huge variation in the public finances of the world’s major oil exporters. Poorly managed emerging economies such as Russia and Venezuela had no resources with which to cushion the blow whereas the Gulf economies have been able to cope quite well. Meanwhile, Norway has been able to provide a small fiscal boost to its economy. Looking ahead, we expect growth to slow in Saudi Arabia as it belatedly cuts its deficit, while any recovery in Russia will be held back by the lack of room for fiscal stimulus.