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We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
MENA can’t escape Trump’s trade war The Executive Order signed by US President Trump yesterday brought a flat 10% tariff on all countries’ exports to the US with an additional reciprocal rate for some economies. While the Middle East may be less …
Spillovers from the war in Gaza and threats of cuts to foreign assistance from the US have thrown the spotlight onto Jordan’s shaky balance of payments and public finances. For now, we think that the dollar peg will remain intact, and a sovereign default …
2nd April 2025
Egypt: a wider budget deficit, but tight fiscal stance Egypt’s cabinet approved the FY2025/26 Budget this week which showed that a primary surplus will be maintained, reiterating that policymakers will stick to the tight fiscal stance that will help to …
27th March 2025
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
Overview – GDP growth in the Middle East and North Africa will pick up over the next couple of years supported by rising oil and LNG output from the Gulf. However, lower oil prices will result in tighter fiscal policy in parts of the Gulf, particularly …
It is becoming clear that President Trump’s actions are driven by both his fixation on reducing the US trade deficit and his transactional approach to dealing with other countries. So, even though the Trump administration’s ideas to transform the entire …
25th March 2025
A combination of stronger oil output and a thriving non-oil economy will support stronger growth in the UAE’s economy this year, helping it to retain its crown as the fastest growing economy in the Gulf. The UAE has continued to abide by OPEC+ policy, in …
Kuwait’s debt law marks a new era for fiscal policy A new public debt law is set to be passed in Kuwait in the near future allowing for the government to finance budget deficits more sustainably. In 2017, Kuwait’s authorisation to issue or refinance debt …
20th March 2025
Egypt is now twelve months into its orthodox policy shift and, so far, the authorities have moved in the right direction towards restoring macro stability. But there is still work to do in the next phase of reforms that is needed to unlock stronger GDP …
13th March 2025
Middle East & North Africa Chart Pack (Mar. '25) …
Inflation plunges, opening the door for first rate cut Egypt’s headline inflation rate slowed sharply from 24.0% y/y in January to a near three-year low of 12.8% y/y in February, which should pave the way for the Central Bank of Egypt (CBE) to start its …
10th March 2025
OPEC+ has now confirmed that it will finally begin to unwind its oil production cuts from the start of next month, providing a gradual boost to Gulf oil sectors and GDP growth. But with oil prices sliding and Aramco reducing its dividend, questions are …
6th March 2025
February’s batch of PMIs across the Gulf were generally softer and we think that non-hydrocarbon sectors in the Gulf will record weaker growth this year. In contrast, Egypt’s economy appears to be recovering from its slowdown last year induced by shift …
5th March 2025
The news that Aramco, Saudi Arabia’s state-owned oil company, will cut its dividend payout this year will put a dent in the Kingdom’s public finances and, together with a likely decline in the state’s oil revenues, may ratchet up pressure for more fiscal …
4th March 2025
OPEC+’s plan to increase oil output by 2.2m barrels per day over the next 18 months or so risks saturating the global market and highlights the downside risks to our already below-consensus oil price forecasts. Despite ongoing tensions within OPEC+ about …
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
Saied’s unorthodoxy keeps Tunisia on risky path Tunisia’s President Kais Saied has resumed his attacks on the central bank, Banque Centrale de Tunisie (BCT), and seems set on having the state take over the Bank’s responsibilities. We’ve long warned that …
27th February 2025
Qatar’s economy will be stuck in the slow lane for much of 2025 as non-hydrocarbon activity slows and LNG output remains constrained. But the North Field will start to come online from Q4 and provide a sizeable boost to growth, which is likely to reach …
26th February 2025
CBE stands pat, but easing around the corner The Central Bank of Egypt (CBE) left its overnight deposit rate unchanged at 27.25% today but, with inflation set to slow sharply over the next couple of months, we think policymakers will start the monetary …
20th February 2025
Egypt’s gas recovery still has a long way to go Egypt’s gas sector appears to be heading towards a resumption of activity that should alleviate domestic shortages and strains in the balance of payments. Last year, Egypt’s economy was blighted by domestic …
Saudi Arabia’s real estate sector is in the midst of a boom and affordability among Saudi citizens for housing is becoming increasingly stretched, which may tempt the authorities to loosen lending criteria in a bid to meet their Vision 2030 targets for …
19th February 2025
The decision by the US and Russia to “lay the groundwork” to end the war in Ukraine marks a potentially significant turning point after three years of conflict. Negotiations will take time and the macroeconomic implications will depend on the features of …
18th February 2025
Gaza will remain key sticking point for MENA President Donald Trump’s doubling down on the future takeover of Gaza and displacement of the Palestinian population has continued to spark backlash from governments across the Middle East and could derail …
13th February 2025
GDP growth in the Middle East and North Africa will accelerate in 2025 on the back of higher oil production in the Gulf. The UAE will be the Gulf’s top performing economy and, elsewhere, we think that growth in Egypt and Morocco will strengthen on the …
12th February 2025
Saudi Arabia’s economic growth will accelerate this year as the Kingdom starts to unwind oil production cuts from April. But while the Kingdom’s non-oil sector started the year on a strong footing, tight fiscal and monetary policy will weigh on growth …
11th February 2025
Inflation nudges lower as first rate cut edges closer Egypt’s headline inflation rate only slowed a touch to 24.0% y/y in January. But with earlier falls in the pound now starting to fall out of the annual price comparison, we expect Egypt’s headline …
10th February 2025
We’d previously argued that President Trump was likely to try to bring the MENA region into the US’s sphere of influence, but controversial statements on the future of Gaza have brought that into question. In a joint press conference with Israeli Prime …
6th February 2025
The renewable rollout in Saudi Arabia is set to accelerate on the back of cheap solar panel imports from China. Given that Saudi Arabia is one of a few countries that directly burns crude oil for electricity, this could add further downward pressure on …
5th February 2025
A mixed start to 2025 as Egypt turns a corner January’s batch of PMIs showed a mixed result as the region’s two largest economies, Saudi Arabia and Egypt, recorded their strongest outturns in several years, while surveys from Kuwait and Qatar softened. In …
4th February 2025
Will OPEC+ heed Trump’s calls on oil output? Last Thursday’s comments from President Trump for OPEC+ to reduce the cost of oil has put some downward pressure on prices in the past week. OPEC+ is unlikely to change its existing plans for oil output (to …
30th January 2025
A softer end to 2024 Saudi Arabia’s flash estimate of GDP showed that the economy grew by just 0.3% q/q in the final quarter of 2024, marking the slowest rate of expansion in a year. We think GDP growth will accelerate this year as oil output cuts are …
March 6 will mark one year since Egypt embarked on a dramatic shift back to orthodox policymaking. So far, the authorities have stuck to most of their pledges. But has enough been done to deliver strong and sustained growth? Which areas still require …
29th January 2025
India’s outbound tourism market is poised to become one of the world’s largest over the coming years. The Maldives and the UAE are arguably the biggest beneficiaries, though Oman and Thailand are well placed to take advantage too. Other EMs – particularly …
27th January 2025
Saudi-US relations already on a stronger footing Over the past year, Saudi Arabia’s shift toward China appears to have been on pause as it awaited to see the victor of the US presidential race. With Donald Trump now back in the White House, there are …
23rd January 2025
Egypt’s economy has struggled over the past year due to the effects of a weak pound, high inflation, and tighter fiscal and monetary policy, but there have been signs recently that a recovery is taking hold. We expect GDP growth will strengthen, and by …
22nd January 2025
Saudi Arabia’s government has been the largest EM issuer of hard currency debt over the past few years and this Update considers what will happen to the Kingdom’s public debt burden under different scenarios for oil prices. The overall conclusion is that …
20th January 2025
The Shape of the Fractured World in 2025 The share of the fracturing global economy that is accounted for by China and its geopolitical allies contracted in 2024, leaving it under a third the size of the US bloc at the start of 2025. This fall was in part …
17th January 2025
Gaza ceasefire: economic spillovers to fade Israel and Hamas provisionally agreed to a ceasefire deal on Wednesday. Israel’s PM Netanyahu today has accused Hamas of reneging on part of the deal. But if this can be overcome, it represents a major …
16th January 2025
Middle East & North Africa Chart Pack (Jan. '25) …
15th January 2025
Inflation eases and to remain low over 2025 This response has been updated with additional analysis of wholesale prices. Saudi Arabia’s headline inflation rate eased a touch from 2.0% y/y in November to 1.9% y/y in December and it is likely to hover …
Saudi’s bumper debt sale now a regular event Saudi Arabia’s National Debt Management Centre (NDMC) outlined its 2025 Borrowing Plan this week and the government has already got its debt issuance in motion. With budget deficits likely over the coming …
9th January 2025
Inflation to continue on its downward path, rate cuts on the way Egypt’s headline inflation rate slowed from 25.5% y/y in November to 24.1% y/y in December, its slowest pace in two years. With earlier falls in the pound falling out of the annual price …
The improvement in Egypt’s macroeconomic stability since March’s policy shift has resulted in a surge in capital inflows on a similar scale to that which followed the 2016 devaluation. But if signs emerge that the authorities are delaying reforms, there’s …
8th January 2025
The Cold War was defined by geopolitical blocs – the Soviet or Eastern bloc against the Western bloc. Geopolitics retreated with the collapse of the Soviet Union. The period from the early-1990s to the early-2010s was instead an era of globalisation: most …
7th January 2025
Donald Trump’s second term could redraw the global geopolitical map. A sustainable “Grand Bargain” with China, warmer relations with Russia, or a breakdown in the relationship between the US and its traditional allies could each reshape supply chains and …
A softer end to 2024 December’s batch of PMIs declined for the most part across the Gulf but we doubt that the strength of non-oil activity will be sustained in 2025, particularly in Saudi Arabia and Kuwait. Elsewhere, Egypt’s PMI fell to an eight month …
6th January 2025
Saudi inflation to fall back over 2025 Saudi inflation rose further in November but there were tentative signs that some of the recent drivers of higher price pressures are fading and we expect the headline rate to drop back towards 1% by end-2025. The …
19th December 2024
Saudi Arabia’s constrained approach to oil policy is here to stay until April and, coupled with the turn to fiscal consolidation, means growth will pick up by less than others expect in 2025. The final estimate of Saudi GDP showed that the pace of …
OPEC+ alters Gulf’s economic outlook Following our previous Weekly , OPEC+ announced that it would be pushing back the start date of when it will unwind oil production cuts to April 2025 and that the pace of increase will be slower than we had previously …
12th December 2024
