Oil prices have fallen over the past month as global recession fears have mounted but, while they are likely to decline further over the coming years, they will remain high by past standards. This will provide scope for Gulf governments to loosen fiscal policy. Indeed, Saudi Arabia and the UAE both unveiled economic relief packages this week, the first sign of officials shifting in this direction. Finally, PMIs this week further reinforced the picture of diverging economic performances between the Gulf and the non-Gulf economies.
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