Bahrain Mirror: The oil crash came and went but the debt pile it left across the Gulf is still growing, leaving the region's energy-dependent economies more vulnerable next time a crisis strikes, reported Bloomberg.

If oil prices crash again, the pain could be greater than five years ago, raising the risk of a regional recession because governments would have to slash spending while markets would be more reluctant to lend, according to Bloomberg economist Ziad Daoud.

While Oman and Bahrain stand out, the experience of the bloc's two smallest economies might be less an exception than a warning for what could lie ahead if governments don't diversify -- and fast.

In 2018, the GCC accounted for nearly a quarter of emerging-market bonds sold in dollars and euros, up from less than 2 percent a decade ago, according to data compiled by Bloomberg. As a whole, Gulf economies have almost tripled the ratio of debt to gross domestic product since 2014.

The Bloomberg report further explained that the picture is uneven across the bloc, with Qatar and Kuwait protected by large financial buffers. "The U.A.E. is also strong. But in Oman and Bahrain, which were slow to implement fiscal reforms despite dwindling energy reserves, the future looks more uncertain."

Bloomberg Economics found that Oman and Bahrain "already have unsustainable debt dynamics," while the outlook is mixed for Saudi Arabia.

Though it's rated lower than Oman, tiny Bahrain's bonds tend to trade higher because markets believe it always be supported by Saudi Arabia, with which it enjoys close political ties. Despite those alliances, Bahrain only got Gulf help once international investors began closing their doors and then only with a promise to reform. Oman is more neutral in its political stance, and therefore seen as more exposed to headwinds unless it makes painful changes.

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