Liquidity levels in UAE and Kuwait are far better than any other countries in the region

Nowadays, more and more countries in the Middle East experience liquidity pressure derived by a number of reasons, and mainly the fall in oil prices. Growing fiscal deficits in countries like Saudi Arabia and Oman limit the country's financial positions, pushing the Governments to further limit banking deposits and borrowing.

As local watchdogs observed, in Oman Government deposits have lowered more than 16 per cent further confirming the negative trends. Similarly, in Saudi Arabia, the Government deposits have decreased similarly to more than 13% since 2015.

While above countries struggle, UAE and Kuwait remain optimistic. The first half of 2016. Low global interest rates are helping to keep foreign debt raising attractive for GCC governments and corporates. "We believe that the more gradual tightening in monetary conditions than in 2H2015 is positive for the growth outlook, though it still continues to be a headwind to economic activity in 2016," Dr Monica Malik, Chief Economist of ADCB.

The liquidity crunch is not expected to affect that much the GDP growth of Kuwait this year with 2.4 per cent expected according to recent data from IMF. The sovereign rating of Kuwait also helps the country to remain strong and raise debt easier and cheaper in comparison to local peers.