Gulf markets mix as Joe Biden emerge victorious in US election

GulfToday Report

Gulf stock markets fell on Sunday after Democrat Joe Biden won the election.

Saudi Arabia’s stock index slumped 0.2% at market opening but gained in early trading and climbed up 0.3% at 07:25 GMT. Markets In other parts of the region were mixed.

The decline mirrored the expectation that the new administration will not bring radical changes to the region’s economy.

Analysts call on the importance of reforms, stating that the expectation of moderate oil prices and a weak US dollar under the new administration could pressurize the Gulf governments budget deficits. 

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Biden’s polices may not bode well for Gulf countries that are working on diversifying their economies and are currently dealing with a strained economy due to coronavirus and lower crude revenues.

 Rachel Ziemba, adjunct senior fellow at the Center for a New American Security said, structural challenges faced by Gulf Cooperation Council economies including the energy transition are likely to be amplified.

Robert Mogielnicki, resident scholar at Washington-based Arab Gulf States Institute had a counter opinion. He said a Biden presidency is not going to make or break Gulf economies.

"The most consequential decisions for the overall health and sustainability of Gulf economies will be smart spending and implementing economic reforms within the region.