MENA Weekly: GCC-ASEAN-China summit, Saudi’s shrinking trade surplus

The GCC-ASEAN-China summit this week contained a lot of platitudes about boosting trade and investment between China and the Gulf. But it doesn’t change our view that the Gulf’s geopolitical alignment is tilting away from China and towards the US. Meanwhile, the latest trade figures out of Saudi Arabia show that lower oil prices are already weighing on exports and, with this likely to continue, fiscal policy will need to tighten further to reduce import demand and rein in the budget deficit.