Despite simmering discontent in Bahrain, fund managers are increasingly bullish about the Gulf as the region’s banks finish cleaning up their balance sheets amid signs that the woes of the real estate sector are nearing their end.

Saudi Arabia, which responded to the waves of protest this year with a 25% increase in public subsidies in March - amounting to some $44bn - is expected to grow by 5.8% this year, according to the International Institute of Finance. The United Arab Emirates, meanwhile, is forecast to expand by 4.4% this year and 3.1% in 2012.