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A slump in agricultural output has weighed heavily on Morocco’s economy since the start of this year. However, exports are now picking up on the back of stronger external demand while the boom in the nascent car sector is showing little sign of ending. As …
26th August 2014
Our GDP Tracker suggests that growth in the Saudi economy slowed to around 4.3% y/y in Q2 from 4.7% y/y in Q1. This was driven by weakness in the oil sector, but it looks like growth in the non-oil sector stabilised from the first quarter. … Saudi growth …
21st August 2014
Equity markets in the Gulf have been among the best performers in the world over the previous year, but they’ve flat-lined during the past month. The one exception is Saudi Arabia, where the stock market has been buoyed by the announcement that it will be …
19th August 2014
The latest data suggest that Saudi consumer spending remains weak by past standards, but it does at least look like the recent slowdown may now have bottomed out. … Saudi consumer spending may be …
14th August 2014
There are growing hopes that the recent return to political stability in Egypt will trigger a revival in bank lending to the private sector. But we think this optimism may be overdone. A heavy burden of nonperforming loans is likely to keep credit …
12th August 2014
The past few months have brought further evidence that credit growth is coming off the boil in parts of the Gulf. As we explain in this Watch, there are reasons to think that this could prove to be more than temporary in Saudi Arabia. In contrast, credit …
7th August 2014
The fall in Egypt’s PMI in July was disappointing in light of the recent improvement in the hard activity data. However, the bigger picture is that the economy is stronger than it was a year ago. Elsewhere, the PMIs point to robust activity in non-oil …
5th August 2014
Three years on from the “Arab Spring” uprisings, the tide is turning in favour of the economies of North Africa. Admittedly, there are still many challenges, not least reining in large twin current account and fiscal deficits. Nonetheless, a gradual …
31st July 2014
Following a difficult few years, the latest data have provided further evidence that things are improving in North Africa. It looks like growth in both Tunisia and Egypt accelerated over the first half of this year. Admittedly, growth in Morocco – …
29th July 2014
Equity markets across the MENA region have rebounded following a poor performance in June. The Dubai stock market has recouped a large chunk of its previous losses. And equities in Saudi Arabia have been buoyed by the possibility that foreigners will soon …
24th July 2014
Having struggled over the past few years, the Egyptian economy has rebounded at the start of 2014 and a number of indicators suggest that growth in Q2 may have been the fastest since early 2012. Barring a fresh political crisis, we expect growth to …
23rd July 2014
The Saudi authorities’ plan to open up the stock market to foreign investors is clearly a step in the right direction. But with equity valuations already stretched, we doubt that it will be the trigger for a marked rally over the medium term. What’s more, …
22nd July 2014
The Egyptian central bank’s surprise decision to hike interest rates today appears to have been in anticipation of a sharp rise in inflation over the coming months. This follows the government’s recent move to raise energy prices. However, economic growth …
17th July 2014
Tunisia’s economy has faced a difficult few years since the country’s revolution in 2011. But assuming that upcoming elections pass smoothly, a return to some form of political stability should lay the foundations for a pick-up in growth over the next …
14th July 2014
Our GDP Tracker suggests that the Saudi economy weakened a touch in May as the boost from the oil sector earlier in the year started to fade while the non-oil sector remained sluggish by past standards. … Growth in Saudi Arabia eases as boost from oil …
10th July 2014
The Qatari authorities have recently painted a pretty upbeat picture of the economy’s prospects. As we explain in this Watch, while the government is probably right in expecting to see relatively strong growth rates over the next couple of years, there …
9th July 2014
The package of energy subsidy cuts unveiled by the Egyptian government over the weekend is a positive first step towards tackling the country’s gaping budget deficit. Further reforms will be needed to put the public finances onto a more sustainable …
7th July 2014
Q1 GDP data showed that the Saudi economy slowed a touch from Q4 on the back of weakness in the non-oil private sector. The latest PMI surveys suggest that growth in this sector stabilised in Q2, although it’s difficult to square this with other …
3rd July 2014
Q1 GDP data published earlier today showed that Egypt’s economy has continued its gradual recovery from last summer’s “second revolution”. And there were some encouraging signs that easing political tensions have led to a pick-up in investment spending. …
30th June 2014
With Egypt’s presidential election now out of the way, policymakers’ attention has turned to reviving the struggling economy. In this Focus , we outline five areas which we think need to be addressed if Egypt is to enjoy a period of strong and sustained …
26th June 2014
The Dubai equity market has fallen sharply over the past month amid concerns that the Emirate’s real estate sector is becoming another bubble. Elsewhere, spreads on Egypt’s dollar-denominated bonds hit post-“Arab Spring” lows earlier this month amid …
24th June 2014
The unfolding crisis in Iraq has cast a shadow over the region, causing equity markets to tumble. As it happens, the largest MENA economies have only limited trade and financial ties with Iraq, meaning that, in aggregate at least, the economic spillovers …
19th June 2014
Bahrain’s economy grew at its fastest pace last year since 2008, but this was driven by a rebound in the oil sector which is unlikely to last. On top of this, political tensions remain high and fiscal policy is likely to become less supportive of growth. …
18th June 2014
There are growing hopes that the gradual recovery in the Egyptian economy will help to bring the dire public finances on to a more sustainable path. But while we think this will have some impact, in the absence of tighter fiscal policy, the budget …
16th June 2014
The unfolding crisis in Iraq, including the capture of key cities by insurgents, will heighten fears that the country is sliding into civil war. While we suspect that the economic impact of the crisis on the rest of the region will be limited, it will …
12th June 2014
Our GDP Tracker suggests that the Saudi economy started the second quarter on a weaker note as growth in the oil sector slowed and activity in the non-oil economy remained sluggish by past standards. … Saudi economy appears to have weakened at the start …
9th June 2014
In its latest Article IV for Saudi, the IMF painted an upbeat picture of the economy. However, as we outline in this Watch , there are good reasons to think that growth may slow over the coming years. … Why we’re relatively downbeat on the Saudi …
5th June 2014
Having embarked on subsidy cuts last year, the Moroccan authorities have made good progress on tackling the country’s weak public finances. There is still work to do if the government is to meet its longer-term targets for the budget deficit. But the key …
4th June 2014
May’s ‘whole economy’ PMI data show that, although the Egyptian economy is faring better than it was last summer, growth is sluggish. And looking ahead, in spite of the optimism following Abdel Fattah al-Sisi’s victory in last week’s presidential …
3rd June 2014
Although the Egyptian central bank left interest rates on hold today, there is growing speculation that, following Abdel Fattah al-Sisi’s decisive victory in the recent presidential election, rate cuts could come back onto the agenda. For our part, we’re …
29th May 2014
Dubai’s equity market tumbled earlier in the month following the upgrade by MSCI from “frontier” to “emerging” market status. Stocks in Abu Dhabi and Qatar (which were also upgraded) fell too, but to a lesser extent. Elsewhere, Egypt’s financial markets …
28th May 2014
Egypt’s upcoming presidential election has cast the spotlight back onto the country’s bumpy transition to democracy. Abdel Fattah al-Sisi, who led last summer’s “second revolution”, is widely expected to sweep to victory, and there are growing hopes that …
22nd May 2014
It looks like economic growth accelerated further in Saudi Arabia, the UAE and Qatar over the first few months of the year. In Saudi Arabia, this was supported by a rebound in the oil sector, while non-oil sectors in the UAE and Qatar have picked up. By …
21st May 2014
The fall in the Egyptian pound in recent weeks is significant given that the central bank had maintained a tight grip on the currency over the past year. No official explanation has been provided for the apparent policy shift. But we suspect that …
20th May 2014
The latest data suggest that Saudi household spending is still relatively sluggish and, with fiscal policy set to become less supportive over the coming years, we’re not anticipating a marked improvement soon. … Little sign of a turnaround in Saudi …
15th May 2014
Egypt has one of the worst fiscal positions in the world, but the risk of default is lower than some seem to think. Funding from the Gulf, coupled with a domestic banking sector willing to purchase and hold public debt, means the authorities shouldn’t …
14th May 2014
Our GDP Tracker suggests that the Saudi Arabian economy grew at a robust rate of over 5% y/y in Q1. However, growth looks set to slow over the next twelve to eighteen months as the rebound in the oil sector tails off and activity in the non-oil economy …
12th May 2014
Abdel Fatah al-Sisi, the leader of last summer’s “second revolution”, looks set to sweep to victory in Egypt’s presidential election, scheduled for 26th - 27th May. In this Watch , we take a closer look at what changes in economic policymaking might occur …
8th May 2014
April’s PMI data from the MENA region suggests that the rebound in the UAE’s economy has strengthened. Meanwhile, the economic recovery in Egypt from last summer’s unrest remains bumpy as the country gears up for presidential elections later this month. …
6th May 2014
A drop in food inflation has caused inflationary pressures to ease across much of the Gulf over the past twelve months. But inflation may now be bottoming out. Food inflation is set to pick-up again in the coming months while in some countries there are …
1st May 2014
Equity markets in the UAE and Qatar have rallied in the past month ahead of their upgrade to emerging market status by MSCI. By contrast, the Egyptian stock market has had a relatively disappointing time as the country gears up for May’s presidential …
29th April 2014
The Central Bank of Egypt kept interest rates on hold today and, with the outlook for inflation deteriorating, they are likely to remain unchanged for the next six to twelve months. … Central Bank of Egypt holds rates as inflation outlook …
28th April 2014
Inflation has followed very different paths in the Gulf’s two largest economies, Saudi Arabia and the United Arab Emirates, in recent months. In Saudi, consumer price inflation has continued to fall, with the headline rate coming in at 2.6% y/y in March, …
24th April 2014
After a torrid few years, the outlook for the North African economies is brightening. Political tensions are easing and the provision of external financial support has shored up balance of payments positions. Admittedly, elections in Egypt and Tunisia …
23rd April 2014
The Saudi Arabian economy picked up in Q4 of last year on the back of the continued rebound in the oil sector. Growth may have accelerated further in Q1, but it is likely to remain below the rates of 6% or so recorded in the previous decade. … Saudi Q4 …
22nd April 2014
Three years on from the Arab Spring uprisings, political uncertainty continues to weigh on the near-term outlook for Egypt, Morocco and Tunisia. But over a longer horizon, assuming that policymakers can push through reforms, these countries could …
15th April 2014
Our GDP Tracker suggests that growth in the Saudi economy accelerated to around 5% y/y in the first few months of this year. The pick-up in growth has been driven by the oil sector. However, there are signs that domestic demand is weakening. … Saudi …
14th April 2014
Egyptian inflation has fallen back in recent months as the effects of last year’s sharp depreciation of the pound have started to unwind. But with the economy starting to recover and the outlook for inflation deteriorating, the case for further interest …
10th April 2014
There appears to be a growing consensus that improvements in the Saudi Arabian labour market mean that the country can sustain rapid consumer credit growth. While we think there is some justification to this argument, we find it far from convincing. … …
9th April 2014
Algerians are set to take to the polls later this month as they vote for their next president. In theory, this could be an opportunity to kick-start much-needed economic reform. But, as we explain in this Watch , there is little prospect of this …
3rd April 2014
