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March’s PMIs from the MENA region, released earlier today, show that the UAE’s non-oil economy continues to strengthen, but domestic demand in Saudi Arabia may have weakened in recent months. Meanwhile, Egypt’s economy is still on a bumpy path. … PMIs …
3rd April 2014
Recently released GDP data showed that growth in the North African economies (Egypt, Morocco and Tunisia) picked up modestly in the final quarter of last year. We expect growth to strengthen further this year, with Egypt benefitting from Gulf-funded …
31st March 2014
Equity markets in the MENA region continue to soar. Dubai’s market has been the region’s best performer since the start of the year, closely followed by that of Egypt, which has been buoyed by optimism surrounding the prospects for political stability in …
27th March 2014
Five years on from Dubai’s debt crisis, the UAE’s banking sector appears to be returning to health, which should open the way for an improvement in credit growth. However, the large overhang of debt from the pre-crisis boom years means banks are likely to …
An influx of financing from the Gulf since last summer has eased strains in Egypt’s balance of payments and brought the country back from the brink of a crisis. Nonetheless, this situation isn’t sustainable over a longer horizon. Eventually, the Egyptian …
24th March 2014
Growth in the MENA region’s major economies appears to have accelerated in recent months. Our GDP tracker points towards a pick-up in growth in the Saudi economy at the start of the year, and timely indicators suggest that the Egyptian and Moroccan …
20th March 2014
A combination of stagnant production and rapidly increasing domestic consumption means that Egypt is set to become a net importer of natural gas in the near future. Support from the Gulf should help to mitigate the impact of lower gas export revenues in …
18th March 2014
The agreement between Dubai, Abu Dhabi and the Central Bank of the UAE to rollover $20bn of Dubai’s government debt marks another important step in the Emirate’s recovery from its 2009-10 crisis. However, the bigger concern lies with debt owed by Dubai’s …
17th March 2014
Egyptian presidential elections are due to be held in the coming months with Field Marshal al-Sisi, the leader of July’s “second revolution”, widely tipped to emerge triumphant. However, he would inherit an economy that is still reeling from three years …
12th March 2014
Our GDP Tracker suggests that growth in the Saudi Arabian economy picked up at the start of this year. But the rebound has been driven by the oil sector, while the non-oil sector continues to struggle. … Pick-up in Saudi economy driven by the oil …
10th March 2014
The rapid rise in Omani government spending in recent years has caused the budget surplus to narrow sharply and, if we’re right in expecting oil prices to fall over the coming years, the budget position could even swing into deficit. The country’s …
6th March 2014
The latest PMI data from the MENA region suggest that growth in non-oil sectors in the Gulf remains relatively robust, bolstered by strengthening external demand. The Egyptian economy is much weaker, although it has picked up since the second half of last …
4th March 2014
The Egyptian central bank’s decision to leave interest rates on hold for the second meeting in a row might suggest that the easing cycle of the past half a year has come to an end. However, given that the economy remains extremely weak, coupled with our …
27th February 2014
Morocco’s exports have, so far, seen little benefit from the recovery in the country’s key trading partners in the euro-zone. But the headline trade figures mask some encouraging developments. In particular, Morocco’s nascent car industry is booming and, …
Equity markets in the MENA region have continued to perform strongly over the past month. Dubai remains the star performer, while recent political developments have buoyed stock markets in Egypt and Tunisia. … MENA equities continue to …
25th February 2014
Qatar is unlikely to return to the double-digit growth rates seen over the past decade, but the government’s ambitious investment programme means that GDP should still expand by a healthy 5% or so over the coming years. This would make it the region’s …
20th February 2014
In spite of their strong trade and financial ties to the euro-zone, Morocco and Tunisia have, so far at least, seen little benefit from the recovery there. Admittedly, inflows of foreign direct investment have risen slightly. However, goods exports are …
19th February 2014
The Egyptian economy has shown signs of recovering in recent months but this has yet to feed through to the labour market. Crucially, GDP growth is still below the rates of around 4-5% that are needed to bring the unemployment rate down. What’s more, high …
18th February 2014
Some of the largest falls in emerging market currencies in recent weeks have come in countries where exchange rates are tightly managed and foreign exchange reserves are low. On this basis, the MENA region’s non-oil producers appear to be vulnerable. …
13th February 2014
Our GDP Tracker suggests that the Saudi economy ended last year on a weaker note. We expect growth to pick up this year, but this will largely be due to a rebound in the oil sector. Activity in the non-oil economy is likely to remain sluggish. … Saudi …
12th February 2014
It’s still early days, but we think that political developments in Tunisia over the past few months provide reasons to be optimistic about the country’s economic outlook. … Is Tunisia really on the path to …
11th February 2014
At first glance, the interim Egyptian government seems to have made some progress in bringing the country’s dire public finances back under control. However, the apparent improvement can largely be explained by the influx of aid from the Gulf which will …
6th February 2014
Saudi consumer spending has grown by 6-7% a year over the past decade, but low-profile indicators suggest that household spending may have lost some steam. … How are Saudi consumers …
5th February 2014
Last month’s PMI suggests that political turmoil surrounding Egypt’s constitutional referendum disrupted economic activity. Meanwhile, growth in non-oil sectors in the Gulf appears to remain strong. … PMIs highlight Egypt’s fragile …
4th February 2014
In spite of their large current account deficits, the MENA region’s non-oil economies have stayed out of the spotlight during the recent turmoil in EM financial markets thanks, it seems, to IMF backstops and aid from the Gulf. So long as these remain in …
30th January 2014
The Egyptian stock market has rallied in recent days amid growing optimism about the prospects for political stability. The recently approved constitution paves the way for elections to take place later this year. And investor sentiment also appears to …
29th January 2014
The MENA region’s financial markets have come through the latest bout of turmoil in EM markets relatively unscathed. Most equity markets have dropped back, although their losses have been small when compared with elsewhere in the emerging world. In fact, …
27th January 2014
Following a tumultuous three years since the Arab Spring uprisings, we expect a recovery to finally get underway in the MENA region’s non-oil producers over the next year or so. Growth should be supported by the strengthening global economy and – in Egypt …
23rd January 2014
The approval of Egypt’s new constitution marks a key political milestone, paving the way for fresh elections to take place in the coming months. However, these could lead to a renewed flare-up in tensions between the Muslim Brotherhood and the armed …
20th January 2014
Despite the fall in inflation in December, the Central Bank of Egypt decided to keep interest rates on hold at its meeting today. We think it’s unlikely that today’s decision marks the end of the current easing cycle. Indeed, we expect inflation to …
16th January 2014
Recent reports that Lebanon could have a new cabinet in a matter of weeks (having not had one for nine months) have raised hopes that the deteriorating public finances may finally be brought under control. However, we doubt that there will be much …
15th January 2014
The latest Saudi activity data add to the evidence that, having rebounded over most of 2013, the economy ended last year on a slightly weaker note. Looking ahead, faster growth in the oil sector means overall GDP growth may pick up a little this year. But …
13th January 2014
Recently released third quarter GDP data show that the impact on Egypt's economy from July's "second revolution" was not as bad as some, ourselves included, had expected. Elsewhere, Qatar remains the region's best performer supported by robust activity in …
8th January 2014
This year’s Saudi government budget envisages the slowest rise in public spending in over a decade. This is welcome from the viewpoint of longer-term fiscal sustainability, but it does mean that government spending is unlikely to provide the same support …
7th January 2014
December's 'whole economy' PMIs for the Middle East and North Africa point towards faster growth in Q4 of last year than in Q3. Encouragingly, Egypt's PMI suggests that the economy is continuing to recover from July's "second revolution". … PMIs suggest …
6th January 2014
The Egyptian stock market has hit a post-"Arab Spring" high. This comes on the back of signs that the economy may finally be finding its feet as well as recent progress towards fresh elections. … Egyptian stocks soar to post-Arab Spring …
23rd December 2013
The Egyptian economy appears to have suffered a tumultuous second half of the year. On a positive note, the latest data provide signs that the economy may finally be finding its feet. And a recovery of sorts could get underway next year, supported by a …
18th December 2013
Having rebounded over the past couple of quarters, the Saudi Arabian economy appears to be ending the year on a slightly weaker note. Oil production has fallen back from the highs it reached in the summer, while activity in the non-oil sector has slowed. …
17th December 2013
The surge in Egyptian inflation to 12.9% y/y last month from 10.5% y/y in October took many by surprise. We think that this rise in inflation can largely be pinned on unflattering base effects and the headline rate should start to ease by early next year. …
12th December 2013
Saudi Arabia’s wide-scale crackdown on illegal migrant workers seems unlikely to have the desired effect of raising the employment of Saudi nationals in the private sector. In the short term, it runs the risk of leading to labour shortages, higher …
9th December 2013
In spite of October’s rise in inflation, the Central Bank of Egypt (CBE) decided to cut interest rates today. It looks like the decision was prompted by the weakness of recent hard activity data, as well as the prospect of further financing from the Gulf. …
5th December 2013
Saudi Arabian Q3 GDP data showed that growth picked up as a rebound in the oil sector more than offset a slowdown in the rest of the economy. Looking ahead, growth may accelerate over the coming quarters but we think it will remain disappointing by past …
4th December 2013
November's PMI data provide further evidence that the Egyptian economy may be finding its feet after a tumultuous summer. Meanwhile, the Saudi PMI pointed to a pick-up in growth in the non-oil sector. So far at least, there aren't any signs that the …
Having won the right to host the 2020 World Expo, Dubai's economy looks set to benefit from higher investment and tourist arrivals. But we're concerned about the probable rise in corporate debt and potential legacy of overcapacity in the economy. … …
27th November 2013
Dubai’s equity market hit a five-year high this month amid growing optimism surrounding the Emirate’s economic rebound. Confidence may be given an extra boost if, as is widely expected, Dubai wins the right to host the 2020 World Expo. An announcement is …
26th November 2013
The rapid expansion of credit in Saudi Arabia is beginning to look like a cause for concern. If sustained, it could be followed by a rise in non-performing loans. Nonetheless, the country seems well positioned to withstand this. Local banks are well …
25th November 2013
The non-oil producing MENA countries have historically tended to back up their currency pegs to the US dollar by maintaining a level of FX reserves sufficient to cover the monetary base. But the monetary base is now larger than FX reserves in Egypt and, …
21st November 2013
The Saudi economy appears to have rebounded in the third quarter of the year. Our GDP tracker points towards growth of around 5% y/y, up from 2.7% y/y in Q2. Most of this improvement has come from the oil sector, where production has been ramped up to …
20th November 2013
High unemployment rates have grabbed the headlines in the MENA region, not only as a catalyst for the Arab Spring revolutions but also for prompting a backlash against expatriate workers in the region’s richer countries. The typical response by …
18th November 2013
The swingeing fuel subsidy cuts imposed by Jordan's government a year ago have, so far at least, made few inroads in narrowing the country's fiscal deficit. Measures to replace subsidies have tended to overcompensate households, probably due to concerns …
14th November 2013
