Filtered by Subscriptions: Middle East & North Africa Economics Use setting Middle East & North Africa Economics
The latest data from Qatar reinforce the picture that the economy has weathered the diplomatic crisis with regional powers. That said, hopes for a resolution to the crisis have been dashed by events over the past month and certain sectors of the economy – …
24th January 2018
Saudi Arabia’s economy should pull out of recession this year as the drag from the oil sector fades and fiscal policy is loosened. But the relief is likely to prove short-lived and, in contrast to the consensus view that the economy will continue to …
23rd January 2018
Saudi inflation remained subdued at the end of last year but the recent introduction of a new value-added tax and a raft of administered price hikes will push inflation up sharply, to more than 6% y/y, over the coming months. That’s higher than most …
The announcement on Friday by Morocco’s central bank that it will move to a more flexible exchange rate regime has raised concerns that the dirham will follow the path of currencies in the rest of North Africa, where similar policy shifts have been …
15th January 2018
The Saudi government looks set to loosen fiscal policy this year which should support a pick-up in economic growth. However, as we explain in this Watch, households won’t be net beneficiaries from this. The introduction of a new household allowance and …
12th January 2018
A further sharp drop in Egyptian inflation in December means that the central bank is likely to embark on an easing cycle at the next monetary policy meeting in February. We expect inflation and interest rates to fall further than most anticipate over the …
10th January 2018
The announcement in Saudi Arabia over the weekend that the government will pay bonuses to civil servants and military personnel means that fiscal policy will be slightly looser this year than had been envisaged in the 2018 budget and more supportive than …
8th January 2018
December’s PMI data suggest that non-oil sectors in the Gulf ended last year on a fairly strong note. And while Egypt’s PMI slipped back last month the survey showed that price pressures there have continued to ease, supporting our view that the central …
4th January 2018
Further sharp falls in Egyptian inflation in the coming months are likely to prompt the central bank to embark on a monetary easing cycle. We expect the benchmark interest rate to be cut to 13.25% by end-2018 and 11.25% by end-2019, from 18.75% at …
3rd January 2018
If the recent protests in Iran rumble on or even spread, the resulting disruptions to activity are likely to weigh on the country’s economy but the fallout for the rest of the MENA economies, as well as global oil markets, should be limited. Moreover, if …
2nd January 2018
The easing of political tensions in the region in recent weeks has reduced concerns about the sustainability of dollar pegs, supporting our view that fears of devaluations in the Gulf looked misplaced. That said, we think Lebanon’s dollar peg still looks …
21st December 2017
The Saudi budget released this afternoon showed that the government has already started to loosen fiscal policy and will continue to do so in 2018. This is a more accommodative stance than we had expected and so we have revised up our GDP growth forecasts …
19th December 2017
Political commentary in the region has focussed on the recent upheaval in Saudi Arabia, but one development that has received little attention is the downfall of the militant group, Islamic State (IS, also known as Daesh). Iraq’s Prime Minister, Haider …
The recent rise in oil prices has raised some hopes that Saudi Arabia’s 2018 budget – to be announced next week – will unveil a shift towards looser fiscal policy to support the economy. However, we think those hopes are likely to be dashed and policy …
14th December 2017
Saudi politics has been a staid affair for decades, but Crown Prince Mohammed bin Salman’s launch of an anti-corruption crackdown and his ratcheting up of tensions with Iran herald a period of greater uncertainty. The crackdown is likely to deal a …
12th December 2017
The sharp fall in Egyptian inflation in November primarily reflected the unwinding of the impact of last year’s depreciation of the pound and paves the way for the central bank to cut interest rates at its meeting later this month. We have pencilled in a …
11th December 2017
The recent political upheaval in Saudi Arabia has cast fresh doubts over the government’s plans to sell a stake in the state-owned oil company, Aramco. Fears that the sale will be scrapped altogether are probably overdone but, given the general …
7th December 2017
November’s PMI data suggest that Saudi Arabia’s non-oil sector has so far shrugged off recent political upheaval. Meanwhile, Egypt’s economy appears to have strengthened as firms continue to benefit from the improvement in external competitiveness. … …
5th December 2017
OPEC’s decision to extend its oil production cuts until the end of 2018 was widely expected and indicates that the Gulf countries are content with oil prices at around $60pb. Despite the deal, the drag on GDP growth from oil output cuts should ease in …
1st December 2017
The Middle East and North Africa has been gripped by political turmoil over the past few weeks. The most high-profile development was the launch of an anti-corruption crackdown in Saudi Arabia, led by Crown Prince Mohammed bin Salman (MbS), which has …
30th November 2017
The worst of the hit to Qatar’s economy from its diplomatic crisis with neighbouring countries has now passed but the early signs suggest the recovery will be slow and uneven. Indeed, certain sectors of the economy – such as tourism and real estate – are …
29th November 2017
Saudi Arabia’s economic downturn appears to have deepened in Q3 on the back of a steeper year-on-year fall in oil production. That said, even if OPEC decides to extend its oil production cuts at its meeting later this week, the oil sector’s drag on the …
27th November 2017
The escalation of tensions between Saudi Arabia and Iran has raised fresh concerns about the region’s dollar pegs. While a devaluation in Lebanon is not out of the question, there are good reasons to think that dollar pegs in the Gulf will remain intact. …
23rd November 2017
Saudi inflation remained in negative territory in October but inflation is likely to jump next year as the government introduces a new value-added tax and pushes ahead with a fresh round of subsidy cuts. … Saudi Arabia Consumer Prices …
21st November 2017
The Tunisian authorities have recently introduced a range of new measures in an effort to tighten their grip on the currency. However, Egypt’s experience suggests that such policies do more harm than good for the economy and simply lead to a sharper …
The political crisis in Lebanon has raised fears that the authorities will be forced to devalue the pound. One thing that has often been overlooked, though, is the risk that this could force the government to default on its large foreign currency debts. … …
17th November 2017
Today’s decision by the Central Bank of Egypt to keep interest rates on hold was not a major surprise given that the recent falls in inflation have been fairly modest. But data to be released in the coming weeks should show inflation dropping back more …
16th November 2017
Reports that Bahrain’s government has requested financial support from its Gulf neighbours has raised fresh questions over the sustainability of the country’s dollar peg. We expect this financing to be forthcoming, but in return the authorities will be …
14th November 2017
The anti-corruption crackdown in Saudi Arabia and mounting tensions between the Kingdom and Iran have unnerved investors this week, although the impact has been more acute in financial markets in the rest of the region than it has been within Saudi Arabia …
9th November 2017
The further drop in Egyptian inflation in October, to 30.8% y/y from 31.6% y/y in September, is welcome but probably not enough for the central bank to cut interest rates at its meeting next week. We expect the first rate cut to come in December. … Egypt …
Events in Saudi Arabia since the weekend have potentially significant, but also complex, implications both for domestic policymaking and the wider region. In this Update, we try to make sense of recent developments by answering five key questions. … Five …
8th November 2017
The deterioration in relations between Lebanon and Saudi Arabia in recent days has raised fresh concerns over the sustainability of Lebanon’s dollar peg. While the country has substantial FX reserves, these would be quickly eroded in the event of severe …
7th November 2017
The arrests of prominent officials and businessmen in Saudi Arabia over the weekend has been welcomed in some quarters as a step towards tackling corruption in the Kingdom and is another sign that Crown Prince Mohammed bin Salman is consolidating power. …
6th November 2017
Tomorrow will mark one year since Egypt’s central bank announced that it would move to a floating exchange rate. As we explain in this Watch, a weaker pound has yet to support a major improvement in the current account position and the recent surge in …
2nd November 2017
Oil prices broke through $60pb this month, up by a third since the middle of the year, but this has failed to provide a fillip to financial markets in the Gulf. In contrast, markets in Egypt have performed well – its equity market was the region’s best …
31st October 2017
The rise in oil prices since the middle of the year could boost the Gulf’s oil export revenues by around $100bn, equal to 5% of regional GDP, on an annual basis. That would push current account positions into surplus in most countries and make major …
30th October 2017
Our GDP Tracker suggests that Saudi Arabia’s economy contracted at a steeper pace in Q3 than in Q2. However, the worst may soon be over. … Saudi downturn deepens in Q3, but close to a …
25th October 2017
Plans announced today by the Saudi government to construct a huge new economic city, called Neom, have grabbed the headlines but the Kingdom has poor form when it comes to implementing mega-projects. Moreover, it may divert policymakers’ attention away …
24th October 2017
Recently-released GDP data confirmed that the blockade on Qatar dealt a blow to its economy in June, but more timely data suggest that the worst has now passed. That said, any recovery is likely to be slowgoing and we expect growth to be weaker the most …
The raft of GDP data released over the past month showed that growth across the Middle East & North Africa continued to slow in Q2. Our weighted-average measure of regional GDP expanded by 1.4% y/y in Q2, down from 2.0% y/y in Q1 and its slowest pace …
20th October 2017
Egypt’s manufacturing sector has been one of the main beneficiaries from a weaker pound but the recent rapid pace of growth will be difficult to sustain in the absence of a significant pick up in investment. … Egypt: investment key to sustaining …
18th October 2017
Saudi inflation stayed in negative territory in September, but with fresh subsidy cuts and the introduction of a new value-added tax on the horizon, we expect it to jump to 4.0-4.5% in the coming months. … Saudi Arabia Consumer Prices …
17th October 2017
Oil policy in the Gulf has been thrust back into the spotlight after the Saudi government disclosed details of Aramco’s export allocations for November. But there is less to this than meets the eye and, while it appears increasingly likely that OPEC will …
12th October 2017
The marked improvement in Saudi Arabia’s current account position over the past year has eased fears that the riyal will be devalued. However, a large chunk of the improvement has been due to weaker imports and lower remittances, a reflection of the heavy …
11th October 2017
Egyptian inflation edged down further in September and we expect it to fall sharply in the coming months, prompting the central bank to start cutting interest rates. … Egypt Consumer Prices …
10th October 2017
The spotlight has turned back on to Iran’s nuclear deal in recent days with President Trump expected to refuse to certify that Iran is still compliant with the accord. There remains a lot of uncertainty over how events will pan out, but in this Update we …
6th October 2017
Growth across the Middle East and North Africa has slowed further this year, but it should recover in 2018 and 2019. In the Gulf, the drag on GDP growth from this year’s oil production cuts will fade. Nonetheless, the recovery will be slow-going. Fiscal …
5th October 2017
September’s PMI data suggest that non-oil sectors in the Gulf slowed a touch in September, although the surveys remained above their mid-year lows. Meanwhile, Egypt’s PMI suggests that its recovery slowed on the back of weaker external demand. … Whole …
3rd October 2017
Official GDP data show that the contraction in Saudi Arabia’s economy worsened in Q2 and our GDP Tracker suggests that downturn deepened further at the start of Q3. We expect a recovery to get underway in 2018-19, but it is likely to be weaker than most …
2nd October 2017
The statement accompanying last night’s decision by Egypt’s central bank to leave interest rates on hold suggests that, with inflation now falling, policymakers are trying to downplay expectations that monetary easing will quickly follow. Accordingly, a …
29th September 2017
