Filtered by Subscriptions: Middle East & North Africa Economics Use setting Middle East & North Africa Economics
Higher oil and gas revenues are likely to prompt a modest shift to looser fiscal policy in the large Gulf economies, although Bahrain and Oman will still need to stick to austerity. Meanwhile, if OPEC+ were to raise production quotas more quickly in …
20th October 2021
Overview – Economic recoveries in the Gulf will continue to gather pace over the coming year on the back of successful vaccine rollouts and higher oil output, and our GDP growth forecasts lie above the consensus. Outside the Gulf, though, recoveries are …
19th October 2021
Egypt: rising inflation to prompt CBE to stay pat The rise in Egyptian inflation last month is likely to delay a turn towards rate cuts. Figures for September, published on Sunday, showed that the headline inflation rate jumped from 5.7% y/y in August to …
14th October 2021
Inflation to edge higher Saudi inflation rose to 0.6% y/y in September and is likely to drift a little higher over the rest of this year. However, we do not envisage a significant pick up in the headline rate and inflation is likely to remain around …
Rally in oil prices to end next year This month’s OPEC+ meeting went as we expected with the group raising production quotas by 400,000bpd and shrugging off pressure to increase output further. As a result, the price of Brent crude rose to over $83pb on …
7th October 2021
Egypt’s economy has emerged from the COVID-19 crisis relatively well, but the country’s lagging vaccine rollout, a slow return of international tourists and tight fiscal policy mean that the recovery from here is likely to be slow-going. GDP is likely to …
6th October 2021
Non-oil sector recoveries in Saudi and Qatar surge ahead September’s batch of whole economy PMIs showed that recoveries in non-hydrocarbon private sectors in Saudi Arabia and Qatar gathered pace as domestic activity strengthened on the back of easing …
5th October 2021
Oil price rally opens the door for fiscal loosening The price of oil hit its highest level in nearly three years this week and, combined with rising output, will help budget and current account positions in the Gulf will improve. This could open the door …
30th September 2021
Inflation in many economies in the region has risen to multi-year highs in recent months. In general, this has been driven higher by a combination of unfavourable base effects from the pandemic, as well as some re-opening inflation and the effects of …
28th September 2021
Qatar a beneficiary of surging gas prices The recent surge in global gas prices has raised concerns in Europe about the impact on inflation and activity, but Qatar could stand to benefit on the back of rising LNG exports and prices. Stronger demand for …
23rd September 2021
The long-awaited World Expo in Dubai will get underway next Friday and while there is likely to be some boost to the economy, this will be short lived. What’s more, as we have long warned, the Expo could leave high rates of overcapacity in Dubai’s real …
The Central Bank of Egypt (CBE) kept interest rates unchanged at Thursday’s MPC meeting amid rising price pressures. However, we still think that inflation will slow in the final months of this year and re-open the door for the CBE to resume its easing …
17th September 2021
Lebanon: finally turning a corner? The news that Lebanon finally formed a new government this week came as welcome relief amid the country’s economic, political and humanitarian crises . But there are still plenty of big hurdles to clear before the …
16th September 2021
Jordan’s public finances deteriorated sharply last year and fiscal consolidation is needed to put the debt position back on a sustainable footing. Sticking to austerity may prove difficult given the economic and political backdrop and the composition of …
15th September 2021
Inflation set to remain subdued Saudi inflation edged down to 0.3% y/y in August and is likely to remain around this level over the coming months. We think that inflation will pick up to 1.0-1.5% y/y in 2022-23, although the possibility of a VAT cut …
Saudi bankruptcy law paying off One of Saudi Arabia’s largest conglomerates is finally on the cusp of securing a debt restructuring agreement with creditors, a sign that recent reforms are helping to speed up bankruptcies. Reports this week suggest the …
9th September 2021
CBE to keep rates on hold as inflation rises further Egypt’s headline inflation rate rose to 5.7% y/y in August, the fastest pace recorded since April last year, and looks set to increase further over then next couple of months. Against this backdrop, we …
Saudi Arabia’s economic recovery lost some steam in Q3 but, with virus restrictions easing further and oil production rising, GDP growth will strengthen over the rest of this year and next. The Q2 flash estimate of Saudi GDP showed the economy expanded by …
7th September 2021
Oil price rebound precedes easy OPEC+ decision This month’s OPEC+ meeting passed without much fanfare as the recent rebound in oil prices prompted the group to push ahead with raising oil output, which will help to lift the Gulf economies further. OPEC+ …
2nd September 2021
Morocco’s strong vaccine rollout and a rebound in the agricultural sector will support a robust recovery over the coming quarters. Although a slow return of tourists and fiscal consolidation will act as headwinds, we still think that GDP growth will be …
High levels of vaccine coverage have paved the way for policymakers across the Gulf to lift measures to contain COVID-19 over the past month or so. The UAE remains ahead of the pack in the vaccine race and has started to deliver booster jabs in recent …
26th August 2021
Egypt: Delta arrives as vaccinations set to speed up Fears are growing that Egypt is on the cusp of a fresh wave of COVID-19 driven by the Delta variant, but past experience suggests that restrictions will remain light touch and there is growing hope that …
Gulf officials to shrug off recent dip in oil prices The latest drop back in oil prices is unlikely to be of much concern to policymakers in the Gulf and we still think that there is a window of opportunity for fiscal policy to be loosened over the next …
19th August 2021
A rise in oil prices has supported an improvement in Saudi Arabia’s current account position, which should be in surplus over the coming years. That, combined with signs that the sovereign wealth fund is slowing its international investments, will help to …
16th August 2021
Egypt: the Russians are coming (slowly) Egypt welcomed back Russian tourists for the first time in six years this week, which will be a relief to the ailing tourism sector, but any economic boost will be limited. Russia suspended flights to Egypt in …
12th August 2021
CBE to keep rates on hold for now as inflation moves back within target Egypt’s headline inflation rate rose to an eight-month high in July and is likely to drift higher over the coming months. Against this backdrop, we think the Central Bank of Egypt …
10th August 2021
Recovery picking up the pace The 1.1% q/q expansion in Saudi Arabia’s GDP in Q2 was driven by the unwinding of the voluntary oil output cuts and the easing of virus-related restrictions supported domestic activity. With the OPEC+ impasse now resolved oil …
9th August 2021
The Central Bank of Egypt (CBE) kept its policy rate on hold on Thursday, and we continue to hold a non-consensus view that a fall in inflation later in the year will allow the CBE to resume its easing cycle in Q4. The decision to keep the benchmark …
6th August 2021
Egypt: price of bread set to rise The announcement that the price for state-subsidised bread in Egypt is set to be raised adds to our view that inflation will drift higher and that policymakers will hold off from cutting interest rates for now. President …
5th August 2021
Non-oil sectors set to experience a stronger second half of the year July’s whole economy PMIs painted a mixed picture with recoveries in Qatar and the UAE’s non-oil sectors picking up pace, while those in Egypt and Saudi Arabia softening. Strong vaccine …
3rd August 2021
The latest on Tunisia’s political turmoil Tunisia’s President Kais Saied’s power grab on Sunday has been followed by further moves that will reinforce concerns about the future of democracy in the country. Whichever way events unfold in Tunisia, the …
29th July 2021
Saudi Arabia’s economic recovery appears to have been quite strong in Q2 and the further easing of virus restrictions and rising oil production means that GDP growth will continue to gather steam over the rest of this year and into 2022. The economy …
The end of the impasse within OPEC+ this month will result in higher oil output and boost recoveries in the Gulf over the second half of this year and in 2022 . Output quotas will rise by 400,000bpd each month after the UAE backed down in return for …
28th July 2021
The decision by Tunisia’s President Kais Saied to sack the prime minister and freeze parliament has raised serious concerns about the future of democracy in the country and couldn’t come at a worse time for the economy, which is already reeling from the …
26th July 2021
Concerns about the Delta variant of COVID-19 have grown over the past week but high vaccine coverage in the Gulf means that policymakers are unlikely to resort to harsh containment measures. Other parts of the region are more susceptible, adding to the …
22nd July 2021
Overview – Strong COVID-19 vaccine rollouts in most of the Gulf and Morocco mean that remaining virus restrictions should be lifted by the end of this year, providing a boost to recoveries that, in the Gulf, will be turbo-charged by the recent OPEC+ deal …
21st July 2021
Saudi-UAE oil spat seemingly resolved Reports suggest that Saudi Arabia and the UAE have reached an agreement over oil output quotas, which will boost economic recoveries across the Gulf. In principle, the pair have agreed to the Saudi-Russia proposal of …
15th July 2021
Inflation set to fall sharply in July Saudi inflation rose to 6.2% y/y in June but it will fall sharply in July to around 1.0 y/y as the effects of last year’s VAT hike fall out of the annual price comparison. Inflation is likely to hover around 1.0-1.5% …
OPEC+ fallout highlights rising Saudi-UAE tensions The failure of OPEC+ to reach an agreement over new output quotas has raised the risk that the deal collapses and the Gulf states ramp up production. This would mechanically lift GDP growth this year and …
8th July 2021
CBE to keep rates on hold for now as inflation drifts higher Egypt’s headline inflation rate edged up to 4.9% y/y in June and is likely to increase further over the coming months. Against this backdrop, we think the Central Bank of Egypt (CBE) will keep …
Gulf non-oil sectors set for stronger recovery over H2 June’s whole economy PMIs for the Gulf were a mixed bag, although one common thread was that weaker external demand offset a pick up in domestic demand. Strong vaccine rollouts mean that most virus …
5th July 2021
Saudi’s Transport & Logistics Strategy to fall short The National Transport and Logistics Strategy launched this week by Saudi Crown Prince Mohammed bin Salman is the latest effort to boost the non-oil sector, but it raises more concerns over whether …
1st July 2021
Saudi inflation is set to fall sharply in July as last year’s VAT hike falls out of the annual comparison. While there will be some upwards inflation pressure from the re-opening of the economy and global supply shortages, a weak recovery in demand is …
Saudi Arabia’s economic recovery seems to have got back on track in Q2 and, as virus restrictions are eased further and oil production cuts are scaled back, a strong second half of the year lies in store. The final Q1 GDP figures confirmed that the Saudi …
29th June 2021
Kuwaiti budget could be a sign of things to come Kuwait’s FY2021/22 budget that was approved this week added to signs from the Gulf that high oil prices are prompting a shift to looser fiscal policy. In a feisty parliamentary session on Tuesday, the …
24th June 2021
The price of oil has continued to rise and will help to improve balance sheets in the Gulf. With oil prices at $75pb, all Gulf economies with the exceptions of Bahrain and Oman are likely to be running current account surpluses, having run deficits in …
Virus numbers have fallen in the past few months in the MENA region and a rapid vaccine rollout should allow most of the Gulf economies, as well as Morocco, to lift restrictions further over the second half of the year. Elsewhere in the region, where the …
21st June 2021
The Central Bank of Egypt (CBE) announced it kept interest rates on hold on Thursday evening and, with inflationary pressures building, the CBE is likely to refrain from cutting rates in the near term. Even so, very high real interest rates and the …
18th June 2021
Hajj restrictions to delay the Saudi recovery The Saudi government confirmed this week that the Hajj pilgrimage will be at very limited capacity, which will weigh on the Kingdom’s economic recovery. Saudi has barred all foreign pilgrims from attending …
17th June 2021
The Egyptian pound has appreciated significantly since the devaluation in 2016 and there are signs that the strength of the currency is weighing on the country’s external competitiveness. We forecast a gradual depreciation from around 15.6/$ now to 17/$ …
15th June 2021
