The increase in Saudi Arabia statutory retirement age could increase the size of the labour force by 10% by 2040 and, in turn, lift potential GDP growth by as much as 1%-pt per annum. Meanwhile, Q1’s balance of payments figures showed the Kingdom continued to struggle to attract direct investment and there are further signs too that the Public Investment Fund is diverting resources from foreign investment into local projects. Elsewhere, Egypt’s current account deficit widened sharply in Q1 as the spillovers of the Israel-Gaza conflict weighed on Suez Canal receipts and tourism exports. But the policy shift and funds from the Gulf have since pulled Egypt back from the brink.
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