Filtered by Subscriptions: Middle East & North Africa Economics Use setting Middle East & North Africa Economics
The Gulf economies are key beneficiaries from the rise in energy prices caused by the Russia-Ukraine crisis. On an annualised basis, oil at $100pb would increase hydrocarbon export revenues by 7-10%-pts of GDP across the Gulf (relative to 2021). This …
28th February 2022
This morning Russia has launched an invasion of Ukraine and in this Weekly we discuss the main channels through which the conflict may affect the Middle East and North Africa. Russia’s President Putin announced earlier today that a “special military …
24th February 2022
Egypt’s government looks set to continue its commitment to tight fiscal policy and bringing down the public debt ratio. However, we hold concerns over the increasing levels of foreign currency debt that will be vulnerable if, as we expect, the pound …
23rd February 2022
PIF gets a (small) hold of Aramco The Saudi government’s transfer of 4% of its stake in the state oil company, Aramco, to the Public Investment Fund (PIF) will not diversify government revenues as Crown Prince Mohammed bin Salman would like to claim and …
17th February 2022
Mortgage lending in Saudi Arabia has ramped up sharply in recent years as the government has tried to push up homeownership among Saudi nationals. This has not provided much of a boost to property prices and there are reasons to think that they will …
15th February 2022
Inflation to drift upwards Saudi inflation stabilised at 1.2% y/y in January and, while we think it will increase over the coming months, it is likely to hover around 1.0-1.5% over the rest of 2022 and 2023. Data released this morning showed that Saudi …
Saudi oil sector taking its foot off the brakes In a TIME interview this week, Saudi Arabia’s Energy Minister Abdulaziz bin Salman (AbS) provided the strongest signal yet that the Kingdom may eventually move to an oil policy focussed on increasing its …
10th February 2022
Saudi ends the year on a strong note; Egyptian inflation jumps Saudi Arabia’s economy grew by a stronger-than-expected 1.6% q/q in the final quarter of 2021 and we think rising oil production will drive above-consensus growth this year. Elsewhere, Egypt’s …
UAE: 2023 to be a taxing year for firms The UAE announced this week that it will introduce a corporation tax which will help to further diversify public revenues away from oil and may provide Dubai’s government with greater resources to step in if …
3rd February 2022
The Central Bank of Egypt (CBE) kept interest rates unchanged at Thursday’s MPC meeting amid stronger price pressures and, if we’re right in expecting the authorities to let the pound weaken gradually this year at the same time that US Federal Reserve …
Recoveries take a knock as Omicron restrictions bite January’s batch of whole economy PMIs showed activity in non-hydrocarbon sectors in the Gulf slowed at the start of this year as governments tightened restrictions to tackle fresh Omicron-driven virus …
Egypt’s current account deficit has widened to alarming levels over the past couple of years which partly reflects the impact of the pandemic but it is also a symptom of an increasingly overvalued currency. We think policymakers will let the pound …
2nd February 2022
With oil prices at current levels, nearly all of the Gulf economies are running twin budget and current account surpluses. We think that governments are more likely to save rather than spend this windfall, limiting the impact on the region's non-oil …
1st February 2022
Central banks in the Gulf will have to raise interest rates in line with the Fed (which we expect to hike four times both this year and next) by virtue of their dollar pegs, adding to headwinds facing non-oil sectors. Outside the Gulf, the main risk is …
28th January 2022
Egyptian structural reform push resumes Further reports that Egypt’s government and military will sell stakes or wholly privatise companies this year provide hope that structural reforms will regain momentum, but the proof will be in the pudding. Planning …
27th January 2022
Saudi Arabia’s economic recovery has hit a bump in the road over the past month or so as the Omicron variant has caused activity in the Kingdom’s non-oil economy to slow. But the experience from other countries suggests this disruption will be brief and, …
26th January 2022
Overview – The recovery across the Middle East and North Africa is likely to gather pace this year, due in large part to the Gulf where rising oil output will cause GDP growth to pick up to rates well above current consensus expectations. Recoveries …
25th January 2022
Our new oil price forecasts The price of oil has risen sharply since the turn of the year and, while we still expect it to fall back by year-end, recent supply issues suggest that it will not decrease by as much as we had expected. As a result, the door …
20th January 2022
Window for Gulf fiscal loosening to close Oil prices have risen to near pre-Omicron highs this week, but we think that is likely to be short lived. As prices drop back the window for governments in the Gulf to loosen fiscal policy will shut. Brent crude …
13th January 2022
Inflation to rise a little further Saudi inflation edged up to 1.2% y/y in December and we think that the headline rate will drift a little higher over the first half of this year before stabilising at around 1.0-1.5% over the rest of 2022 and 2023. Data …
We think that GDP growth in the Gulf will be stronger than most expect this year on the back of rising oil output. Elsewhere, we expect a larger depreciation of the Egyptian pound than most anticipate and, if anything, there is a growing risk of an even …
12th January 2022
Inflation to drift higher, rate hikes coming on to the agenda Egypt’s headline inflation rate rose to 5.9% y/y in December and it is likely to increase further over the coming months, peaking around the mid-point of the central bank’s target range in Q2. …
10th January 2022
OPEC+ stays the course This week’s OPEC+ meeting turned into a fairly straightforward affair with the group opting to raise its quota by the planned 400,000bpd in February and supply is likely to increase further over the coming months. But if we’re right …
6th January 2022
December’s batch of whole economy PMIs showed that activity in non-oil sectors in the Gulf softened due to the uncertainty created by the emergence of the Omicron variant. Restrictions have been tightened in recent weeks, but the experience from other …
5th January 2022
A deep-dive into Saudi Arabia’s ‘austere’ budget The Saudi 2022 Budget released earlier this week revealed that the government expects to cut spending to help it run a budget surplus for the first time since 2013. But the true fiscal stance is being …
16th December 2021
Governments across the Gulf have begun to unveil their 2022 budgets and tight fiscal policy remains the order of the day. Saudi Arabia outlined a 6% cut in spending next year that is expected to push the budget into surplus for the first since 2013. And …
15th December 2021
Inflation to pick up a little further Saudi inflation rose to 1.1% y/y in November, and is likely to increase further through the first half of next year. Even so, we expect price pressures to remain subdued, at 1.0-2.0% over the course of 2022-23, …
Iran nuclear deal talks hit (another) bump The seventh round of talks to revive the Iran nuclear deal resumed today, having been halted on Friday as both sides failed to make headway. It appears that an agreement is a long way off, which could put upwards …
9th December 2021
Inflation drops, although CBE won’t ease policy yet Egypt’s headline inflation rate dropped to 5.6% y/y in November and, while we think inflation will rise in the coming months, it is likely to be at the lower end of the central bank’s 7±2% target range …
OPEC+ left the door open last week to change its oil output policy before the next meeting and, if output is raised more slowly or not at all, this would knock GDP growth back mechanically in the Gulf – plausibly by around 0.5%-pts next year. At the same …
8th December 2021
November’s batch of whole economy PMIs showed that non-oil sectors in the Gulf continued their recent strong trend, but the emergence of the Omicron variant – and threat of tighter restrictions – presents a clear downside risk to our above-consensus 2022 …
7th December 2021
Low vaccine coverage and large tourism sectors mean that the non-Gulf economies are particularly vulnerable to the emergence of the Omicron variant. Meanwhile, the drop in oil prices and the likelihood that OPEC+ raises oil output more slowly than …
2nd December 2021
The economic recovery in Saudi Arabia has picked up pace and should end the year on a strong note. The emergence of the Omicron variant has clouded the outlook, but for now we expect economic growth in the Kingdom to strengthen in 2022 on the back of …
The Middle East and North African economies are potentially among the most vulnerable to the fallout from the Omicron strain of COVID-19 . The North African economies as well as Lebanon and Jordan have low vaccination rates and large tourism sectors, …
30th November 2021
What could the SPR release mean for the Gulf? The US-led release of oil reserves did little to bring down the price of oil as President Biden would have hoped and we suspect that the move is unlikely to drastically alter the outlook for the Gulf …
25th November 2021
Tunisia’s external position is in a dire state and policymakers have little ammunition available to defend the dinar. We think the currency will depreciate by more than 10% against the euro by the end of next year and the risks lie heavily to the …
Tunisia show little appetite for austerity Tunisia’s government upwardly revised its 2021 budget deficit target this week which, coupled with growing signs of it making concessions to appease the UGTT labour union, adds to our view that the public …
18th November 2021
Most banking sectors in the region (with the notable exception of Lebanon) have, so far, come through the COVID-19 crisis in relatively good shape. But with support programmes now being withdrawn, there is a risk that vulnerabilities in Tunisia, Qatar, …
Inflation to drift higher, but remain subdued Saudi inflation edged higher to 0.8% y/y in October and will probably continue to drift upwards over the coming months. Overall, though, we expect price pressures to remain subdued, at 1.0-2.0% over the course …
15th November 2021
Tunisia unrest adds to debt restructuring worries Developments in Tunisia over the past week further add to our view that President Saied and his government will be unable to push through much-needed fiscal reforms, making a sovereign debt restructuring …
11th November 2021
Inflation to remain elevated over the coming months Egypt’s headline inflation rate eased to 6.3% y/y in October and is likely to remain around 6.0-6.5% over the rest of this year and in early 2022. Against this backdrop, we think the Central Bank of …
10th November 2021
Oil sector fuelling the Kingdom’s recovery The Saudi economy expanded by 5.8% q/q in Q3, the fastest pace of growth in over a decade, as the ramping up of oil production drove the recovery. As OPEC+ continues to raise production quotas, remaining virus …
9th November 2021
Egyptian inflation risks lie to the upside Rising wheat and gas prices have added to concerns about inflation in Egypt, raising the risk that the central bank fails to deliver the interest rate cuts that we currently anticipate next year. The government’s …
4th November 2021
Saudi Arabia’s economic recovery looks to have picked up speed in Q3 and should remain strong over the rest of this year and 2022, underpinned by rising oil output. Final Q2 GDP figures showed the economy expanded by 0.7% q/q in seasonally-adjusted terms, …
The rally in oil prices has opened the door for some of the larger Gulf economies to loosen fiscal policy, but governments in Bahrain and Oman will need to continue tightening to repair their dire balance sheets. Even with further fiscal consolidation, we …
3rd November 2021
Gulf non-oil sectors ending the year on a strong note October’s batch of whole economy PMIs showed that recoveries in non-hydrocarbon sectors in the Gulf strengthened, particularly in the UAE as the Expo got underway this month. But price pressures are …
The Central Bank of Egypt (CBE) kept interest rates unchanged at Thursday’s MPC meeting amid rising price pressures. Against this backdrop, we think that the central bank is likely to delay the resumption of its easing cycle until the middle of next year. …
29th October 2021
OPEC+ to stick to its guns Next week’s OPEC+ meeting is set to see the group resist calls for it raise output more quickly amid high oil prices. Were output cuts to be unwound faster, that would on balance probably provide a boost to GDP growth in the …
28th October 2021
The Gulf countries will be among the biggest winners globally from the recent rally in energy prices but most other parts of the Middle East and North Africa are net oil importers and are likely to be negatively affected. Higher energy prices will push up …
27th October 2021
Lebanon’s long and winding road to recovery The IMF confirmed this week that technical talks with Lebanon have restarted, suggesting that the country is making tentative steps to emerge from its crisis. Prime Minister Najib Mikati has said he hoped a deal …
21st October 2021
