Saudi Arabia and Egypt follow divergent paths

The latest activity data suggest that the MENA region’s two largest economies, Saudi Arabia and Egypt, have headed in opposite directions at the start of 2015. After recording strong growth last year, Egypt’s economy has slowed in recent months. This partly reflects the unwinding of favourable base effects, but it also seems to be the result of some underlying weakness, particularly in the construction sector. In contrast, despite fears that the fall in oil prices would push the Saudi economy into recession, our GDP Tracker suggests that growth strengthened to as much as 4% y/y in Q1.