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The latest whole economy PMIs from the MENA region suggest that the boost to Saudi Arabia’s economy from the recent “accession bonus” has already started to fade. The bigger picture, however, is that the Gulf economies are still holding up well in spite …
5th May 2015
Interest rate decisions by the Central Bank of Egypt (CBE) are notoriously difficult to predict but it seems that, having been distracted by balance of payments concerns over the past few years, policymakers have now focused their attention back on to …
30th April 2015
The reshuffle at the top of Saudi Arabia’s government probably has more political than economic implications. In particular, it means that any hopes for a swift end to the Yemen conflict have probably been dashed. Meanwhile, Ali al-Naimi’s departure as …
29th April 2015
While the crisis in Yemen has dragged on, stock markets in the Gulf have rebounded in the past month as fears that it could trigger a broader regional conflict have eased. … Equities in the Gulf rebound as Yemen fears …
28th April 2015
The decision by the Central Bank of Egypt to leave interest rates unchanged today was a close call, but it looks like the recent rise in inflation tipped the balance on the MPC away from lowering rates. Further ahead, inflation should drop back in the …
23rd April 2015
The conflict in Yemen and an outline nuclear agreement between Iran and the West has thrust the region’s politics back into the spotlight. Although it looks like problems in Yemen are likely to drag on, the reaction in the Middle East’s financial markets …
With inflation at an eight-year low and public sector workers receiving a bonus following King Salman’s recent accession to the throne, household spending in Saudi Arabia appears to have gathered steam. However, we think this is likely to prove …
21st April 2015
Our GDP Tracker suggests that Saudi Arabia’s economy strengthened in February as the drag from the oil sector eased further and activity in the non-oil sector picked up. But this is likely to prove temporary and we expect growth to settle at 1.5-2.0% in …
16th April 2015
Inflation in Saudi Arabia eased further last month, to 2.0% y/y, driven in large part by a drop in housing rental price inflation. Against the backdrop of slower growth and weak commodity prices, we expect inflation to stay low for the rest of this year. …
15th April 2015
Algeria is among the most vulnerable economies in the MENA region to lower oil prices and, while large FX savings mean it should be able to muddle through for the next few years, the economy will eventually hit a crunch point whereby a sharp fiscal …
The outlook for the North African economies of Egypt, Morocco and Tunisia has brightened over the last twelve months and we expect growth to strengthen again this year. Further ahead, low income levels and rapidly growing populations mean that annual GDP …
13th April 2015
There are many details that still need to be ironed out, but earlier this month Iran and the West moved another step closer to securing an agreement over Tehran’s nuclear programme. As we explain in this Watch , if a deal can be secured the economic …
9th April 2015
The rise in Egyptian inflation to 11.5% y/y last month was driven almost entirely by a rise in food and utility prices. As a result, we think it’s unlikely to have much impact on monetary policy. Further out, we still expect inflation to remain in double …
The latest whole economy PMIs from the MENA region suggest that, in spite of lower oil prices, the Gulf economies are still holding up well. Meanwhile, activity in Egypt’s economy appears to have softened in the first quarter of this year, but we don’t …
8th April 2015
Saudi Arabia’s lack of a response to the plunge in oil prices has triggered a torrent of conspiracy theories, including plots to hurt Russia and Iran. These have been given extra prominence in light of the latter’s apparent role in the escalating conflict …
1st April 2015
The unfolding crisis in Yemen and the launch of air strikes by Saudi Arabia and its allies on the Houthi rebels has triggered a sell-off in equity markets across the MENA region over the past week or so. … Yemen crisis weighs on region’s equity …
31st March 2015
The unfolding crisis in Yemen and the commencement of air strikes by Saudi Arabia and its allies on the Houthi rebels has raised concerns of a broader regional conflict. We suspect that the worst of these fears are overdone and the wider economic impact …
26th March 2015
Even though oil prices continue to languish at around $55pb, there is still no sign that Saudi Arabia will give in to pressure from other OPEC members to cut oil output. Oil Minister, Ali al-Naimi, has been resolute in his assertion that the Kingdom will …
25th March 2015
Egypt’s recent Economic and Development Conference, which was seen as a milestone in the government’s strategy to raise much-needed investment, saw the announcement of further financial support from the Gulf as well as some ambitious public sector-led …
19th March 2015
Recent calls for the Gulf countries to ditch their dollar pegs and allow their currencies to float are likely to fall on deaf ears. While there are some arguments in favour of shifting to more flexible currency regimes, we think that the dollar pegs are …
18th March 2015
Our GDP Tracker suggests that growth in Saudi Arabia’s economy slowed to under 2% y/y at the start of this year. Consumer spending may receive a boost over the coming months following King Salman’s decision to grant public sector workers an additional …
16th March 2015
The Egyptian government has organised this week’s Economic and Development Conference as a milestone in its strategy to raise much-needed investment. The spotlight will be on the unveiling of large public sector-led projects but we think it’s just as …
12th March 2015
Saudi Arabia’s inflation rate eased further in February to 2.1% y/y, driven in large part by another drop in food inflation. Against the backdrop of slower growth and weak commodity prices, we expect inflation to remain low for the rest of this year. … …
Egyptian inflation edged up to 10.6% y/y in February and is likely to stay close to 10% for the next few months. Further interest rate cuts are unlikely until the impact of last year’s energy price hikes falls out of the annual price comparison in Q3. … …
10th March 2015
The Gulf countries should be able to stomach low prices for the next few years at least, but further down the line some form of adjustment is likely to be needed and we think that fiscal policy will do most of the work. While there are a number of …
5th March 2015
We think fears that the plunge in oil prices since the middle of last year will force Saudi Arabia to ditch its dollar peg and devalue the riyal are overdone. The Kingdom has plenty of resources to sustain domestic spending and defend the peg. And even if …
4th March 2015
The latest whole economy PMIs from the MENA region provide further evidence that the fall in oil prices hasn’t caused activity in the Gulf economies to collapse, as some had feared. Indeed, activity remains relatively strong. Meanwhile, we doubt that the …
3rd March 2015
After a surprise rate cut last month, the Egyptian central bank left interest rates unchanged today. Looking ahead, we think that policymakers will hold off from lowering rates again until the direct impact of last year’s energy price hikes falls out of …
26th February 2015
The past month has brought further evidence that inflation is slowing across the MENA region. In Saudi Arabia, inflation now stands at its lowest rate in more than eight years, while price pressures have also eased in most of the other Gulf economies, as …
A pick-up in oil prices has supported a small rebound in Gulf stock markets over the past month but, further out, hopes of a sharp rally are likely to be disappointed. Meanwhile, having allowed the pound to depreciate last month, the Egyptian authorities …
24th February 2015
The latest data from Saudi Arabia suggest that economic activity was steady, but unspectacular, at the end of last year and we expect growth to remain relatively sluggish at 1.5-2.0% in 2015-16. … Weaker growth the new norm for Saudi …
20th February 2015
The plunge in oil prices means that current account positions in parts of the Gulf have slipped from surplus into deficit. In these countries, FX reserves are now being drawn upon to finance external shortfalls and sustain domestic spending but, so far at …
19th February 2015
The fall in oil prices has led to a sharp reversal of fortunes in the Middle East and North Africa. Fears of steep falls in output in the Gulf are overdone, but growth will weaken in the coming years. In contrast, the outlook for the North African …
12th February 2015
Inflation in Saudi Arabia continued to ease at the start of this year and, against the backdrop of slower economic growth and weak commodity prices, we expect it to remain low over the next twelve months. … Saudi Arabia Consumer Prices …
Egyptian inflation fell back in January and looks set to ease further over the coming months. Further interest rate cuts are likely this year, but we suspect that the CBE will wait until the effects of last year’s energy price hikes fall out of the annual …
10th February 2015
Oman is one of the few Gulf States that isn’t well placed to weather a period of low oil prices and, as a result, a fiscal squeeze will be needed. The authorities may be able to muddle through over the next couple of years by drawing down savings, but …
5th February 2015
January’s whole economy PMI data suggest that, in spite of the drop in oil prices at the end of last year, activity in the Gulf economies has continued to hold up well. Meanwhile, the dip in Egypt’s PMI was disappointing but the bigger picture is that the …
3rd February 2015
The Egyptian stock market has rallied in the past month, buoyed by the economy’s brightening prospects and hopes that the central bank’s decision to loosen its grip on the pound marks a shift towards more orthodox policymaking. … Egyptian equities hit …
29th January 2015
We think the depreciation of the Egyptian pound over the past week has further to go and the currency might plausibly weaken to around 8.25/US$ by the end of this year, a 10% fall against the dollar from its current rate. But given the central bank’s …
28th January 2015
After a prolonged period of exchange rate stability, the Central Bank of Egypt (CBE) loosened its grip on the pound this month, and the currency has since fallen by 3.5% against the US dollar. The CBE has been characteristically opaque about its …
26th January 2015
The passing away of Saudi Arabia’s King Abdullah has raised concerns about the issue of succession and whether this might lead to disruptions to policymaking in the Kingdom. The key point, though, is that the royal succession has been planned for many …
23rd January 2015
Concerns that the plunge in oil prices will push the Saudi economy into a deep recession this year look overdone. We expect growth to slow this year and next, but a collapse in output looks unlikely. … Saudi economy won’t collapse but growth will soften …
21st January 2015
The slowdown in Saudi GDP growth in Q4, to just 2.0% y/y, provides the first evidence that the plunge in oil prices has caused growth to soften. But so far, there are no signs of a collapse in output. … Saudi Arabia GDP …
20th January 2015
The small fall in the Egyptian pound in the past couple of days is significant given that the central bank had kept a tight grip on the currency since last summer and we think that the pound’s depreciation has further to run. No official explanation has …
19th January 2015
In a surprise decision today, Egypt’s central bank (CBE) became the latest in the emerging world to cut interest rates. Although the slide in oil prices is unlikely to have much direct impact on domestic inflation, it has helped to ease strains in the …
15th January 2015
Saudi Arabia’s inflation rate fell to an eight-year low of 2.4% y/y in December. But we suspect that the big fall in inflation is now behind us and the headline rate may even edge up over the coming years. … Saudi Arabia Consumer Prices …
Our GDP Tracker suggests that growth in the Saudi economy eased towards the end of last year, but there aren’t any signs that the plunge in oil prices has caused activity to collapse. Looking ahead, we expect growth to soften further as fiscal policy …
14th January 2015
We’ve written extensively in recent months about the losses the Gulf economies face in light of the plunge in oil prices. But in this Watch we explain why the North African economies of Egypt, Morocco and Tunisia stand to benefit from a period of lower …
13th January 2015
We’ve argued for some time that the Gulf economies are set to run a current account deficit this year for the first time in over a decade, and the latest plunge in oil prices means this deficit could come in at almost 10% of GDP – something not seen since …
8th January 2015
The rise in Egyptian inflation last month, which took it back into double-digits, rules out any possibility of an interest rate cut by the Central Bank of Egypt at next week’s meeting. … Egypt Consumer Prices …
