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Saudi Arabia has cut oil output aggressively in the past two years but this has failed to prevent a slide in the Kingdom’s oil revenues. Officials are facing a tough choice over what to do next and, for now, we think that they will follow through with …
11th September 2024
Inflation picks up, CBE will wait until 2025 before cutting rates Egypt’s headline inflation strengthened from 25.7% y/y in July to 26.2% y/y in August, breaking a five month streak of decelerating inflation, after electricity and fuel price hikes. We …
10th September 2024
Is OPEC+ backing itself into a corner again? The price of oil has slumped even further this week and is now not far off its lowest level in three years. With a potential end to the Libya crisis in sight and our expectation of global oil demand to stay …
5th September 2024
Attention in Egypt is turning to the timing of the first interest rate cut. The lessons from the start of the last easing cycle in 2018 suggest that this is likely to begin in Q1, which is a little later than most expect. But the more important point is …
3rd September 2024
Slowly but surely, Egypt’s economy is recovering This PMI response has been updated with additional analysis of the UAE's survey published on 4th September. August’s batch of PMIs showed a more positive outturn for the Gulf’s private non-oil sectors, but …
Libya’s oil shutdown could influence OPEC+ The oil market was rocked by two political shocks in the past week: an exchange of missiles between Israel and Hezbollah and a crisis in Libya, which led to cuts to its oil output. At the margin, the loss of …
29th August 2024
Growth in the Gulf economies is likely to pick up in the coming quarters, particularly as oil output starts to rise from October. The outlook will become more challenging from 2025 as oil prices fall back and it becomes more difficult to sustain loose …
28th August 2024
Ceasefire seems a long way off Despite the US government’s efforts to push for a ceasefire agreement between Israel and Hamas this week, a deal seems some way off. The economic spillovers from the war in Gaza have been largest for the economies of Egypt, …
22nd August 2024
The rapid expansion of commercial bank lending in Saudi Arabia has raised the risk of an increase in non-performing loans and heightened the exposure of the banking sector to both the real estate market and global risk appetite. But, Saudi banks are …
20th August 2024
The global macroeconomic risks surrounding a possible ceasefire deal between Israel and Hamas are asymmetric. An agreement – while having significant economic consequences for countries in the region – would probably not itself be a game-changer for …
19th August 2024
Kuwait’s tax overhaul falls a little short… Governments in Kuwait and Saudi Arabia have both stepped up reform efforts over the past week. Kuwait’s reforms are focused on the public finances, and diversifying revenues away from oil. Reports suggest that …
15th August 2024
Inflation likely to ease as 2025 approaches Saudi Arabia’s headline inflation rate was unchanged at 1.5% y/y in July, but we expect that the headline rate will ease back over the remainder of this year and potentially fall back below 1% y/y by early 2025. …
Jordan’s economy has been among the hardest hit from the indirect spillovers of the war in Gaza. While severe balance of payments of strains are likely to be avoided, GDP growth will suffer as the key tourism sector has taken the brunt of the impact. And …
14th August 2024
Signs of a thaw in frosty relations between India and China don’t point to a fundamental realignment in India’s position in a fracturing global economy. But they highlight a growing theme of some EMs tactically courting investment from China to put …
13th August 2024
Sell-off’s hit to oil likely to be reversed Fears of a US recession have rattled global financial markets earlier in the week, and those in the Middle East weren’t spared. We think the spillover into the oil market has gone too far, though, and it raises …
8th August 2024
This report has been updated with additional analysis and a chart and table of key figures. Inflation falls despite subsidy cuts Egypt’s headline inflation slowed from 27.5% y/y in June to 25.7% y/y in July, its lowest rate since December 2022. And this …
The UAE’s economy has been the strongest performer in the Gulf over the past year or so and a robust non-oil sector should help the UAE retain its crown as the fastest growing economy in the region. Recently-released Q1 GDP data from Abu Dhabi and Dubai …
6th August 2024
Fears of a US recession have rattled EM equity markets at a time when EM economies themselves are showing more pronounced signs of weakness. Most EM currencies have held up well, suggesting a dovish tilt may come from EM central banks – particularly those …
5th August 2024
Non-oil sectors in the Gulf continue to cool This response has been updated with additional analysis, including of Qatar's PMI. July’s batch of PMIs were softer across the board, adding to signs that activity in private non-hydrocarbon sectors in the Gulf …
Regional tensions rise after Israel strikes Israel’s assassination of high-ranking Hezbollah and Hamas officials this week in retaliation for the rocket strike on Israeli-occupied Golan Heights has left tensions on the brink of boiling over. An aggressive …
1st August 2024
Strong non-oil growth underpins solid Q2 Saudi Arabia’s flash estimate of GDP showed that that the economy grew by a solid 1.4% q/q in Q2 and, while non-oil activity is likely to slow over the second half of this year, it will be more than offset by …
31st July 2024
29th July 2024
The rocket strike on the Israeli-occupied Golan Heights over the weekend has heightened fears of a full-blown conflict between Israel and Hezbollah in Lebanon. For Israel, this risks adding to pressure on its already strained public finances, and would …
Continuing blackouts in Egypt show need for a fix Egypt’s electricity blackouts have persisted this week and, while there is light at the end of the tunnel, the government needs to boost energy investments to avoid a repeat of power cuts in the coming …
25th July 2024
The electricity blackouts that have blighted Egypt this summer may be nearing an end. But in the absence of new major gas discoveries, in the longer run rising energy demand will result in renewed balance of payments problems from higher imports or will …
23rd July 2024
Trump sets out his stall for warmer Saudi ties Donald Trump has outlined his intentions to improve relations with Saudi Arabia if he wins re-election. But potential tensions over the handling of the Israel-Gaza conflict mean that, for now, Saudi officials …
18th July 2024
Inflation nudges down but a minor bump is on the cards in Q3 Saudi Arabia’s headline inflation rate edged slightly down to a six-month low of 1.5% y/y in June and, while we expect a small increase in the headline rate during Q3, the bigger picture remains …
16th July 2024
The economic impact of Saudi’s new pension age New pension directives laid out in Saudi Arabia have raised the retirement age in the Kingdom. The potential boost to the size of the labour force could strengthen GDP growth over the coming decades. The …
11th July 2024
Saudi Arabia’s GDP growth is likely to pick up, and markedly so in 2025. But that will be driven by rising oil output. We think that activity in the non-oil economy will slow. Indeed, there are signs in the low-profile data that this has already started …
Inflation falls despite bread price hikes Egypt’s headline inflation slowed from 28.1% y/y in May to 27.5% y/y in June, the lowest outturn since the start of 2023. And this came in spite of the baladi bread price hike. Increases to electricity and fuel …
10th July 2024
A facelift for Egypt’s cabinet, but no shift in policy Egypt’s cabinet was shaken up this week but the new faces are highly unlikely to diverge from the economic policy path their predecessors were on, particularly when it comes to the public finances. …
4th July 2024
Egypt’s government faces a likely further rise in debt servicing costs over the coming year. But the good news is that the budget for the 2024/25 fiscal year (which started this week) reaffirmed the commitment to fiscal consolidation. So long as the …
3rd July 2024
Saudi Arabia’s Crown Prince Mohammed bin Salman’s (MbS) ultimate succession to become king is inevitable and a formality. Having been the de-facto leader of the Kingdom for several years it may not result in much of a deviation in economic policymaking. …
1st July 2024
This page brings together our analysis of how Donald Trump's return to the White House will affect the outlook for emerging economies. Use the Table of Contents on the right to navigate. All of our analysis on the election, including the implications for …
28th June 2024
Egypt needs to adapt to keep the lights on Daily blackouts in Egypt have returned as gas shortages intensify and, while the government can afford to spend its way out of the issue for now, climate risks require a permanent shift in strategy. Temperatures …
27th June 2024
Bank Al-Maghrib joins the EM rate cutters Morocco’s central bank, Bank Al-Maghrib (BAM) announced this afternoon that it has cut its key policy interest rate by 25bp, to 2.75%. We expect that the Bank will continue to tread cautiously, as the governor has …
25th June 2024
Growth in the Gulf economies is likely to pick up in the coming quarters, particularly as oil output starts to rise from October. We think non-oil sectors will continue to grow strongly. But the outlook will become more challenging from 2025 as oil prices …
Lebanon on verge of being drawn into the war Skirmishes between Hezbollah and Israeli forces have intensified, culminating in Israel’s approval of an “offensive” into Lebanon this week. Not only does this threaten to exacerbate Lebanon’s prolonged …
20th June 2024
Overview – Growth in the Gulf economies is likely to pick up in the coming quarters, particularly as oil output starts to rise from October. We think non-oil sectors will continue to grow strongly. But the outlook will become more challenging from 2025 as …
18th June 2024
Morocco: riding the EV wave Morocco’s domestic auto industry has boomed over the past decade and is drawing investment from major firms in Europe and China. With plans to more than double output in the coming years, the sector is likely to provide a …
13th June 2024
Inflation hits slowest pace in over a year Egypt’s headline inflation dropped back from 32.5% y/y in April to 28.1% y/y, the lowest outturn since the start of 2023. Inflation is likely to rise again in June and July due to government price hikes, …
10th June 2024
UAE emerges as clear winner from OPEC+ decision The decision by OPEC+ to keep oil production lower this year means that GDP growth across the Gulf will be a little weaker than we had previously expected. However, the UAE came away from the meeting the …
6th June 2024
At long last, OPEC+ outlined a plan on Sunday for when and how members would unwind the large production curbs currently in place. We assume that this plan is followed th rough and that output gradually increases from October, pushing the crude market …
4th June 2024
This response has been updated with additional analysis of the UAE's May release. Gulf continues to lead the way as Egypt shows positive signs May’s batch of PMIs showed that private non-oil sectors have remained a point of strength in the Gulf economies …
The decision by OPEC+ to keep oil production lower over the rest of this year means that oil sectors in the Gulf will grow more slowly than we had previously anticipated and we have revised down our GDP growth forecasts for this year and next. The …
3rd June 2024
Stick or twist for OPEC+ Oil markets are gearing up for Sunday’s OPEC+ meeting which looks set to be a close call on how the group decides to take forward oil policy. OPEC+ has reduced its oil output by 3.2mn bpd since October 2022, but oil prices have …
30th May 2024
Low oil output in the Gulf has constrained economic growth so far this year and the upcoming OPEC+ meeting will prove pivotal to the outlook over the rest of this year. Elsewhere in Middle East and North Africa, external financial support has mostly …
29th May 2024
US pulling Saudi back from China’s orbit US officials this week suggested that a mooted grand deal with Saudi Arabia could be signed off in the coming weeks. This would redraw how the Kingdom aligns itself in a fracturing global economy. Jake Sullivan, …
23rd May 2024
After exiting recession in Q1, Saudi Arabia’s economy should continue to expand over the rest of this year on the back of strong private non-oil growth and higher oil output. But next month’s OPEC meeting is likely to be a close call and if the group (led …
22nd May 2024
The death of Iran’s President Ebrahim Raisi yesterday creates greater uncertainty over the succession planning for the next Supreme Leader. But, taking a step back, the balance of political power within Iran means that there is unlikely to be a major …
20th May 2024
