How account deficits impact currencies GCC countries have maintained their currency pegs based on their strong fiscal and current account positions. They usually have fiscal and current surpluses with solid oil revenues and exceptionally high levels of forex assets held by sovereign wealth funds and public institutions. Despite constrained spending and marginally recent improvement in oil prices, an absence of new revenue-raising measures (with the exception of VAT in Oman) means that GCC governments’ fiscal deficits will narrow only slightly in 2021. Moody’s forecasts the median fiscal deficit to remain wide at 6 per cent of GDP in 2021, driving a further deterioration in fiscal strength, which will be most acute in Bahrain, Oman and Saudi Arabia.