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We will update the linked webpage with additional analysis during the next hour. Inflation edges up, but should resume slowdown over the rest of the year Saudi Arabia’s inflation rate rose a touch to 2.8% y/y in May, as an acceleration in non-food …
15th June 2023
Saudi Arabia’s fiscal position has deteriorated over the past few quarters on the back of lower oil prices and production, and officials are increasingly doing all they can to sustain the current loose fiscal stance. But if, as we expect, oil prices fall …
12th June 2023
Is Saudi Arabia taking its eye off the ball? Outside of the usual economics newsflow this week, Saudi Arabia has been the hot topic in the footballing and golfing world. It was announced control of four Saudi Pro League clubs is being transferred to the …
8th June 2023
Saudi Arabia pushed through another oil production cut at the OPEC+ meeting, but, it will come at the cost of slower economic growth and we now think the economy will contract by 0.5% this year. The one crumb of comfort is that higher oil prices and loose …
5th June 2023
All eyes on OPEC+ Sunday’s OPEC+ meeting is going to be a closely watched affair amid speculation that Saudi Arabia will push for another oil output cut. Our expectation is that OPEC+ will stick with current output quotas. (Listen to an on-demand …
1st June 2023
Tunisia’s central bank independence under fire A new wave of reforms supposedly laid out by Tunisia’s President Saied’s have taken aim at the central bank’s (BCT’s) mandate which could result in it being used for unorthodox measures. That would …
25th May 2023
The flash Q1 GDP figures for Saudi Arabia showed the economy grew at its weakest pace in two years at the start of 2023, reflecting the cut in oil production in line with the OPEC+ decision in October. And the even more recent voluntary output reductions …
24th May 2023
The Central Bank of Egypt (CBE) opted to leave interest rates unchanged at Thursday evening’s MPC meeting and the lack of comment on the pound will only add to investor concerns about the commitment to orthodoxy. Unless something changes soon, the path …
19th May 2023
Over the past couple of weeks we have held a series of roundtable discussions with clients across Asia and North America on the outlook for EMs. In this Update we provide our thoughts on the recurring questions that we received, including on China’s …
Egypt stepping up reforms to attract investments The first privatisation deal in nearly a year took place in Egypt this week and the prime minister outlined fresh steps to overhaul the business environment, but loosening the central bank’s grip on the …
18th May 2023
Fears among investors have continued to grow that Egypt’s government will default on its debt in the coming years although, for now at least, there remains a path to avoid such an outcome. Taking that path will require the government to step back from …
This webpage has been updated with a table and chart of key data. Inflation steady, but should resume its slowdown over the rest of the year Saudi Arabia’s inflation rate was unchanged at 2.7% y/y in April, as an increase in non-food inflation offset …
15th May 2023
Egypt’s make or break moment This week saw positive news in Egypt regarding the public finances and the privatisation drive. But next week’s MPC meeting will prove critical as to whether policymakers can get out of the economic crisis. Finance Minister …
11th May 2023
We were in the Gulf last week visiting clients and this Update takes stock of the key talking points that emerged, from a sense of optimism surrounding the Gulf economies to despair and fear regarding Egypt and other parts of North Africa. One thing that …
This webpage has been updated with additional analysis and key chart and table of data. Inflation eases, but another rate hike on the cards next Thursday Egypt’s inflation rate slowed from a near-five-year high of 32.7% y/y in March to 30.6% y/y in April, …
10th May 2023
Flash GDP figures showed that Saudi Arabia’s economy contracted in Q1 on the back of OPEC+-agreed oil output cuts, but growth in the non-oil economy remained strong. The “voluntary” oil production reductions announced last month will continue to weigh on …
9th May 2023
The idea of a new BRICS currency to settle trade or hold in reserves instead of the dollar has been doing the rounds recently. This could be modelled on the IMF’s Special Drawing Rights. But getting India on board with China would be difficult. And if the …
4th May 2023
Note: We’re holding a special 20-minute online briefing all about EM debt risks this Thursday at 10:00 EDT/15:00 BST . Register now . Oil prices: “Don’t get cocky OPEC+” The price of oil has dropped sharply this week on fears about the health of the …
This webpage has been updated with additional analysis and a chart of key data. Non-hydrocarbon sectors in the Gulf continue to enjoy a strong start to 2023 April’s PMIs for the region showed that activity in private non-hydrocarbon sectors in the Gulf …
3rd May 2023
Note: We’re holding a special 20-minute online briefing all about EM debt risks this Thursday at 10:00 EDT/15:00 BST . Register now . Egypt’s balance of payments (BoP) position strengthened markedly late last year, but policymakers’ reluctance to live up …
2nd May 2023
With Egyptian policymakers dawdling on the IMF’s reform demand, pressure is growing for another devaluation of the pound and investors are increasingly fearing that a sovereign default could follow. For now at least, there is still a path out of the …
27th April 2023
Balance of payments strains have prompted Egypt, Morocco and Tunisia to turn to the IMF over the past six months or so, but agreements in Egypt and Tunisia are faltering. The IMF postponed its first review of Egypt’s deal amid the government’s slow …
26th April 2023
Aramco transfer accelerates under Vision 2030 plan Saudi Arabia’s government transferred a further 4% of Aramco to the Public Investment Fund (PIF) this week as part of its efforts to diversify its revenues away from oil as part of Vision 2030. But there …
20th April 2023
This report has been updated with an additional table and chart of the key data. Price pressures continue to ease Saudi Arabia’s headline inflation rate slowed from 3.0% y/y in February to 2.7% y/y in March as both food and non-food inflation decreased …
13th April 2023
Inflation nearing a peak but devaluation fears linger Egyptian inflation rose to its fastest pace since mid-2017 in March and, while there are signs it could be nearing its peak, mounting pressure on the pound presents a clear upside risk. Data released …
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Gulf economies to slow on back of OPEC+ cuts One of the main angles to the surprise voluntary oil output cuts by OPEC+ is geopolitical – it’s another …
6th April 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Gulf non-oil sectors still leading the pack; Egypt price pressures starting to ease March’s batch of PMIs showed that activity in non-oil sectors …
4th April 2023
Note: We’ll be discussing the OPEC+ decision and answering your questions in an online briefing at 10:00 EDT/15:00 BST today . Register here . The surprise announcement of a further 1.66mn bpd cut to oil output by OPEC+ will reduce GDP growth mechanically …
3rd April 2023
Yesterday, OPEC+ members announced voluntary cuts to production from May until the end of the year. In total, the cuts amount to 1.16m bpd or about 1.1% of global supply, with Saudi Arabia accounting for the lion’s share of 0.5m bpd. At the same time, …
In the wake of the surprise move by OPEC+ to cut oil production, we held a special online briefing about the decision’s economic and market implications – as well as what this signals about global politics. Economists from across our Macro and Commodities …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . CBE delivers, but more tightening still needed The Central Bank of Egypt (CBE) announced that it raised interest rates by 200bp, taking the overnight …
30th March 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . H2-oh… Droughts in the Middle East and North Africa are becoming more frequent and more severe, with Morocco and Tunisia experiencing them right now. …
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Overview – Growth across the Middle East and North Africa is set to slow sharply, and by more than most expect, in 2023. IMF deals will help to …
Recent turmoil in the banking sector may have been a US and European story, but there are potentially important angles for Emerging Market investors. Our latest EM Drop-In explored the economic spill-over risks from the recent panic and the …
28th March 2023
One of the main channels through which the Gulf countries are exposed to worries about the health of the global banking system in through energy markets, with the price of Brent crude falling by 13% so far this month. If prices were to stay at current …
24th March 2023
Crisis of confidence at crunch CBE meeting The Central Bank of Egypt’s decision in February to leave interest rates on hold looks to have been a policy misstep and, with inflation surging and growing concerns over the commitment to orthodox policymaking, …
23rd March 2023
While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
A key channel through which emerging markets could be affected by the strains in the global banking sector is if lending by foreign banks falls sharply. On this front, EMs’ vulnerabilities have eased since the Global Financial Crisis. But there are still …
16th March 2023
The newsflow this week has been dominated by the problems at Silicon Valley Bank (SVB) and Credit Suisse which have raised concerns over the health of the global banking system. If concerns continue to mount, this would pose downside risks to currencies …
This report has been updated with additional analysis and a table and chart of key data. Inflation past its peak Saudi Arabia’s headline inflation rate slowed to 3.0% y/y in February on the back of an easing of both food and non-food inflation. We think …
15th March 2023
At the time of writing, financial markets appear to be stabilising after the turmoil caused by the collapse of SVB. And it doesn’t look like EMs have suffered large capital outflows or strains in their banking sectors. If this relatively benign scenario …
14th March 2023
The restoration of diplomatic ties between Saudi Arabia and Iran adds to signs that geopolitical tensions in the Middle East are easing, which may help to reduce risk premia in financial assets in the region as well as the oil market. Tensions will not …
13th March 2023
The future of OPEC+ on the table once more Reports have re-emerged in the past week that the UAE may be seeking an exit from OPEC+ and, if the group persists with its current quotas, tensions could boil over. This would support our view that oil …
9th March 2023
This webpage has been updated with additional analysis, Chart and Table of key figures. Inflation continues to soar, tightening cycle to resume Egypt’s headline inflation rate jumped to 31.9% y/y in February, leaving it just shy of an all-time high and …
Egypt’s government feeling the hit Recent falls in the pound and rising borrowing costs forced Egypt’s Ministry of Finance to revise up its targets for debt and the budget deficit earlier this week, but we remain of the view that the government will be …
2nd March 2023
Household spending in Saudi Arabia appeared to soften in the final months of 2022, but surveys suggest that consumers are optimistic about the outlook. The backdrop of loose fiscal policy, an improved labour market and falling inflation means that …
1st March 2023
Morocco: drought, food, inflation and unrest The effects of another severe drought in Morocco have weighed on growth, pushed up inflation and fuelled pockets of unrest, but strong rainfall provides hope that the worst may soon be over. The drought that …
23rd February 2023
After a stellar performance for most of 2022, the Gulf economies are slowing. Primarily, that has reflected the impact of oil production cuts agreed with the rest of OPEC+ which is weighing on growth in oil sectors. And in the UAE and Qatar at least, the …
Dubai’s GREs well positioned to meet debts for now The pick-up in Dubai’s economy over the past year or so has provided a better environment for government-related entities (GREs) to service large debts. But while repayments shouldn’t be much of an issue …
16th February 2023
This report has been updated with additional analysis and a Table and Chart of key data. Inflation edges higher to its peak Saudi Arabia’s headline inflation rate nudged up from 3.3% y/y in December to 3.4% y/y in January, which came on the back of a …
15th February 2023
