Gloom descends on Gulf as oil price slump hits economy

A caustic slogan is doing the rounds on social networks in the Gulf states this festive season: “All I want for Christmas is for oil prices to go up.”  Gloom has descended on the region amid an oil price rout that has halved the price of crude over 18 months and wiped $360bn off export earnings just this past year.  State contractors, the property sector and even foreign investors have all felt the pain as the slump pushes governments to cut back spending.  “2015 has been a difficult year, but this is just the beginning of a multiyear adjustment process: 2016 will be just as tough, and then there is 2017 and 2018,” says Masood Ahmed, the International Monetary Fund director for the Gulf region. “Next year the slowdown is not going to ease up.”  Swingeing spending cuts have unnerved private businesses in Saudi Arabia, the region’s largest economy, and elsewhere — as well as undermining the policy of government largesse long used to defuse social tensions.

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