The private sector in the two biggest Gulf Arab economies grew at the slowest pace in years in October, corporate surveys showed yesterday, indicating low oil prices are starting to slow business activity across the region. The seasonally adjusted Emirates NBD Saudi Arabia Purchasing Managers' Index for last month dropped to 55.7, its lowest level since the survey began in August 2009, when the world's top oil exporter was grappling with the global financial crisis. The equivalent index for the United Arab Emirates, which measures growth in private manufacturing and services excluding oil, fell to a 30-month low of 54.0. Until the last few months, heavy government spending in the region's six wealthy oil states insulated them from low oil prices. Government revenues shrank, but they dug into huge financial reserves to keep pouring money into their economies.
About the author
Research Associate at Center for Islam and Global Affairs (CIGA) at Istanbul Sabahattin Zaim University