2021 Gulf: Gulf region at a familiar crossroads: oil dependence or diversification

The short-term outlook is consistent across the six Gulf countries, marked by high fiscal deficits and increasing debt levels, reform efforts, the nationalization of labor, and continuous support to the private sector to weather the aftermath of the pandemic. Prospects for longer-term growth are contingent on the success of diversification efforts away from oil. However, Gulf governments will continue to resort to traditional policies of streaming oil revenues back into the economy through project awards to boost consumer demand rather than investment in diversification.