Kuwait’s budget laws have created problems financing the deficit that are now reaching a crunch point, but it seems most likely that the government will be able to get around these. Elsewhere, as COVID-19 outbreaks have worsened in the Gulf, governments have tightened restrictions that will put recoveries on ice. Finally, Egypt’s state-owned National Investment Bank reduced yields on certificates that could signal a possible rate cut at today’s MPC meeting. But, with inflation set to rise in the coming months, we think policymakers will hold off loosening policy until later in the year.
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