VAT hike aims to shore up Saudi’s finances amid low risk of public resistance

VAT hike aims to shore up Saudi’s finances amid low risk of public resistance

**Written and disseminated among select contacts on May 12**

Saudi Arabia announced a series of measures on Monday – including a three-fold hike in VAT from July – to address a sharp deterioration in its financial position. A policy response to the twin crises of lower oil prices and the global coronavirus pandemic was inevitable, but the austerity measures are far-reaching and will hit Saudis at a time when many businesses are already struggling amid severely restricted economic activity.

Rachna Uppal | Senior Analyst | r.uppal@castlereagh.net

VAT hike aims to shore up Saudi’s finances amid low risk of public resistance

Iraq: a compromise government for crisis management

**Written and disseminated among select contacts on May 11**

Iraq’s new PM, whose appointment on May 6 put an end to months of political stalemate in Iraq, faces multiple economic, social and geopolitical challenges. Before broader reform can be introduced, it will have to tackle a flailing economy, hit particularly hard by low oil prices and coronavirus. And while the new PM has the support of key political interests – the US, Iran and main parliamentary coalitions Fateh and Sairoon – he will face difficulties in trying to balance multiple interest groups and keep social protests at bay.

Daniel Moshashai | Regional Analyst Geopolitics & Infrastructure | d.moshashai@castlereagh.net

VAT hike aims to shore up Saudi’s finances amid low risk of public resistance

UAE banks face multiple challenges

**Written and disseminated among select contacts on April 15**

Substantial government stimulus measures will help the UAE’s banking sector navigate the impact of the coronavirus crisis, but doubts remain over whether they will effectively translate into swift economic recovery once restrictions are lifted. Lenders certainly have the ability to lend – but whether they have the willingness to lend is the key consideration.

Rachna Uppal | Senior Analyst Business & Finance | r.uppal@castlereagh.net