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September’s data show that a sharp fall in food price inflation helped to offset a rise in Egypt’s house price inflation. Accordingly, headline inflation fell for the fourth consecutive month. Meanwhile, core inflation rose. But, since it is still in …
11th October 2011
North Africa’s hefty external financing requirements, coupled with turmoil in the global financial markets, have increased the risk that the region could be hit by a balance of payments crisis. Against this backdrop, Egypt’s decision to recommence funding …
7th October 2011
September’s PMI data suggest that growth in the UAE’s non-oil private sector accelerated last month. However, the reading was still low and adds weight to our view that growth will be weaker over the coming year. … UAE HSBC/Markit PMI …
5th October 2011
September’s PMI data show that output in Saudi Arabia’s non-oil private sector is still growing. But the fact that both the headline index and the output component have hit record lows suggests that the economy is not immune from events in the global …
4th October 2011
The recent political turmoil, the so-called ‘Arab Spring’, could ultimately lead to a marked acceleration in economic growth for some parts of the Arab World. Egypt, Morocco and, to a lesser extent, Saudi Arabia have the most scope to boost their …
Following recent downward revisions to our forecasts for growth across the developed and emerging markets, we have also cut our forecasts for the Middle East and North Africa (MENA) region. We now expect GDP to grow by around 3.3% in 2012 (compared to the …
30th September 2011
Saudi Arabia’s move to allow women to vote (and run) in municipal elections, and to be appointed to the Shoura Council, is an important and positive political move. But the economic benefits are likely to be limited. The big gain to the economy would …
27th September 2011
The Arab World’s banks are better prepared to face any fallout from the global sovereign debt problems than they were during the financial crisis in 2008. Back then, the region’s financial institutions were hit hard, which played a major role in the …
21st September 2011
A further drop in the cost of housing pushed last month’s overall consumer price inflation in the UAE to its lowest level since early last year. To add to the good news, food price inflation is also starting to fall. … UAE Consumer Prices …
20th September 2011
Fresh concerns that Egypt could face a fiscal and external funding crisis over the next three years have pushed the country back to the IMF. In June, Egypt turned its back on offers of help from multilateral organisations after the Gulf States promised …
16th September 2011
August’s data show that the drop in food price inflation has helped to offset the impact of rising housing costs in Saudi Arabia. Since the food component accounts for a quarter of the consumer price basket, headline inflation has stabilised. … Saudi …
15th September 2011
August’s data show that a sharp fall in food price inflation helped to push headline inflation in Egypt down to its lowest level since the end of 2007. Core inflation also fell. But, due to concerns that the Egyptian pound may depreciate, we don’t think …
13th September 2011
The preliminary data from Egypt suggest that GDP grew by 1.8% y/y in the 2010/11 fiscal year (which runs from July to June). The output data (if not revised when more details are released on the 22nd) mean that Q2’s output was better than expected. Since …
9th September 2011
August’s PMI data show that Saudi Arabia’s non-oil private sector grew at its slowest rate since the beginning of 2010. What’s more, the output component hit a record low last month. However, despite the global economic turmoil, the Saudi private sector …
8th September 2011
August’s PMI data were disappointing, showing that the UAE’s non-oil private sector expanded at its slowest pace since May 2010. More worryingly, output was flat from the previous month. Meanwhile, producers continue to face a squeeze on their profit …
We think that the much-reported risks to the value of the foreign assets held by the Gulf Cooperation Council (GCC) countries from the US economic troubles are overstated. Admittedly, the hydrocarbon-rich Gulf economies are heavily exposed to the US …
7th September 2011
Higher oil and manufacturing revenues helped to offset the decline in Bahrain’s services sector in the second quarter of this year. What’s more, although the country’s GDP grew by only 0.8% y/y in Q2 (down from 1.8% y/y in Q1), it has performed better …
6th September 2011
Concerns that the global economy may fall into recession again have increased the likelihood of a drop in the oil price, which in turn poses some downside risks to Saudi Arabia’s economy. Indeed, a change in Brent crude prices could have an impact on the …
3rd September 2011
Egypt’s second quarter unemployment data, in keeping with other industrial indicators, reflect the poor overall state of the economy. Although the jobless rate appears to have levelled off (at just under 12%) in the last quarter, we don’t think that it is …
31st August 2011
There were no surprises from Egypt’s Central Bank today as the benchmark interest rate was left unchanged at a record low of 8.25%. With the economy still weak, and core inflation (the bank’s preferred measure) in single digits, the likelihood of a rate …
26th August 2011
The Libyan economy may begin to feel the benefits of ‘regime change’ sooner than many commentators expect. Given the composition of the Transitional National Council (TNC) and Libya’s vast financial and natural resource wealth, it is possible that …
23rd August 2011
Inflation pressures are easing in most countries in the Middle East. In the oil-rich Gulf States, despite a rapid rise in food inflation over the past two months, subdued housing costs have eased pressures on headline inflation in most countries. …
20th August 2011
The recent data show that inflation has either stabilised or started to fall in most Gulf countries over the past few months. And with a fall in food inflation set to outweigh a stimulus-related rise in core pressures, we expect headline inflation across …
19th August 2011
It goes without saying that the risks to North Africa’s economies from the deepening crisis in the euro-zone have increased in recent weeks. The EU is the major trading partner and source of tourism revenues for Egypt, Algeria, Morocco and Tunisia. …
12th August 2011
July’s data show that a slowdown in food inflation helped to ease overall consumer price pressures in Egypt. But core inflation (which is the Central Bank’s preferred measure for setting interest rates) also fell. This ensures that a hike in rates is …
11th August 2011
The drop in the oil price over the past two weeks has led to concerns that the Gulf States will have to scale back their recent spending plans. Admittedly, the current budget commitments are likely to push some of the Gulf’s governments into deficit next …
July’s PMI data show that output in Saudi Arabia’s non-oil private sector grew at its slowest rate since the beginning of 2010. However, exports growth hit a record high in July. This is good news given that the recent GDP data show that non-oil exports …
4th August 2011
July’s PMI data show that the UAE’s non-oil private sector is still growing, but the pace of growth has slowed. The deteriorating global economic climate and the country’s own credit squeeze seem to be taking their toll. … UAE HSBC/Markit PMI …
The high oil price and increased production will ensure continued healthy revenues in the oil-rich Gulf States. As a result, government spending is likely to increase further, which will ensure that the Gulf economies grow strongly in the near term. …
30th July 2011
Saudi Arabia’s additional $1 billion in aid to Jordan will help to avert a short-term fiscal crisis in the resource-poor country. But we are more concerned that this aid will lead to government complacency in terms of necessary economic reforms. … What is …
27th July 2011
High energy prices have widened the fiscal gap in the Middle East. In the oil-rich Gulf States, the governments are awash with oil money. Meanwhile, the resource-poor Arab countries are struggling with the increased cost of food and fuel subsidies, which …
20th July 2011
Most equity markets in the Arab world have bounced back from the lows reached in March when regional political risks were at their highest. Since the initial bounce though, overall market performance has been subdued. However, we don’t think further …
15th July 2011
The euphoria that accompanied Egypt’s January revolution has given way to the realities of the economic and political challenges facing the country. Overall, we think that the initial expectations of a rapid economic transformation were premature, and …
13th July 2011
The negative outlook for the euro-zone economies will increase pressure on the economies of Egypt and Tunisia, both of which have been hit hard by political turmoil. The European Union (EU) is the major trading partner for both countries, but of the …
12th July 2011
June’s PMI data suggest that Saudi Arabia’s economy is in something of a sweet spot at present, with output in the non-oil private sector picking up pace and inflation pressures starting to ease a little. … Saudi Arabia HSBC/Markit PMI …
5th July 2011
The relative valuations of emerging market equities and bonds are no longer as attractive as they have been in the past. But the fears of overheating and hard landings that have held many back so far this year are generally exaggerated or at least …
1st July 2011
The private sector in the oil-rich Gulf States (in particular the UAE and Kuwait) is still struggling with tight credit conditions. The region’s banks are slowly recovering from the aftermath of the global financial crisis. Meanwhile, banking conditions …
21st June 2011
Concerns that the dollar is set to weaken further has reignited the debate on the dollar peg in the Gulf, which if abandoned would allow the region’s central banks to take control of monetary policy. Moreover, the region’s trade links are shifting away …
18th June 2011
Oman has recently announced significant additional government spending over the previous commitments made in April, which is likely to have an impact on economic growth in the near term. Nonetheless, while the fiscal stimulus may help reduce short-term …
10th June 2011
May’s PMI data show that, even though the pace of growth has slowed from April, the UAE’s non-oil private sector is still growing at a healthy rate. However, employment growth is not yet reflecting the overall increase in output, which may be due to the …
6th June 2011
May’s PMI data show that employment in Saudi Arabia’s non-oil private sector grew at its fastest rate since the end of 2009. Meanwhile, exports grew rapidly in May, which is most likely due to a boost in demand across the Gulf countries (as a result of …
Egypt’s government budget for the fiscal year 2011/12 (which starts in July) has focused on public sector salaries, as well as food and fuel subsidies, which is predictable given the social unrest and recent strikes. Even though this may help to offset …
2nd June 2011
The announcement by Saudi Arabia’s government that foreign worker visas will not be renewed beyond six years will be a major blow for the country’s private sector. If the plans are implemented, there will be a negative impact on labour productivity and, …
31st May 2011
Recent reports of a G8 ‘Marshal Plan’, as well as pledges of financial aid and investment from the Gulf, US and Europe, have contributed to a rally in Egypt’s stock market in recent weeks, which has risen by nearly 10% since the beginning of May. However, …
27th May 2011
The fall in tourism revenues in the Middle East and North Africa (MENA) region will have serious economic implications in the near term. Even if visitor numbers start to increase (as political conditions improve), a decrease in average tourist spending …
25th May 2011
Rising global commodity prices have pushed food price inflation up in most Arab countries. The recent depreciation in the dollar and government fiscal stimulus have also contributed to the increase in prices. Even though this will worry the resource-poor …
20th May 2011
The Gulf Cooperation Council’s (GCC) decision to invite Jordan and Morocco to join shows the Council’s determination to ensure the political survival of the two remaining (and friendly) Arab monarchies. Jordan’s geopolitical importance to the Gulf …
11th May 2011
April’s PMI data show that the rapid growth in domestic demand has helped the UAE’s non-oil private sector record its best monthly performance since the survey began in August 2009. Nonetheless, producer cost pressures may soon start affecting consumer …
3rd May 2011
April’s PMI data show that even though the overall performance of Saudi Arabia’s non-oil private sector remains strong, the pace of growth is slowing down. More worryingly, price pressures are building. … Saudi Arabia HSBC/Markit PMI …
The rapidly deteriorating political situation in Syria will undoubtedly worsen the economic conditions in the Middle East and North Africa (MENA) region. Admittedly, the country’s GDP amounted to less than 3% of the total output of Arab countries in 2010 …
28th April 2011
