Clouds gather over North Africa

Successful elections in Tunisia and Morocco, and initially in Egypt, have been overshadowed by a marked deterioration in economic conditions in North Africa. Indeed, Egypt is at a growing risk of a full-blown of balance of payments crisis. In contrast, this years’ high oil price coupled with increased production will ensure healthy revenues in the oil-rich Gulf Cooperation Council (GCC) States. Therefore, increased government spending should insulate these economies from the negative impact of the global slowdown on oil demand and prices.