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Gulf to lead the recovery

A rapid roll-out of COVID-19 vaccines, combined with rising oil production and higher oil prices, will support a quick recovery this year in the Gulf economies. But other parts of the Middle East and North Africa are likely to take longer to recover their lost ground amid a slower roll-out of vaccines and tight fiscal policy.
William Jackson Chief Emerging Markets Economist
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Middle East Economics Weekly

Tunisia rate hike, Saudi budget data, Egypt privatisations

Tunisia’s central bank hiked interest rates this week with policymakers almost certainly having one eye on the country’s fragile external position. But we do not think that this will prevent sharp falls in the dinar and, in turn, a sovereign default. Elsewhere, Saudi Arabia posted its largest budget surplus since 2013 in Q1 on the back of high oil prices and continued tight fiscal policy. If oil prices remain high, though, the proverbial purse strings are likely to be loosened, supporting activity in the non-oil sector. Finally, more details emerged of Egypt’s forthcoming privatisation drive with the government planning to remove itself from a whole swathe of sectors.

19 May 2022

Middle East Economics Update

Saudi set for bumper GDP growth this year

Saudi Arabia’s economy grew at its fastest pace in a decade in Q1 and we think this strength will carry on over the rest of this year. The combination of rising oil output and the increasing likelihood of looser fiscal policy underpin our above-consensus forecast for the Kingdom’s economy to grow by 10% in 2022.

18 May 2022

Middle East Economics Update

Saudi inflation to stay in check, risks lie to downside

Headline inflation in Saudi Arabia rose to 2.3% y/y in April and we think that it will continue to accelerate over the coming months. Unlike in other parts of the emerging world, however, inflation will not surge to multi-year highs and, if anything, the risks to our inflation forecast lie to the downside.

18 May 2022

More from William Jackson

Emerging Europe Data Response

Russia Consumer Prices (Jun.)

The further rise in Russian inflation to a stronger-than-expected 6.5% y/y in June means the central bank (CBR) is likely to up the pace of tightening when it meets in a couple of weeks. A 75bp hike (to 6.25%) seems most likely, but the probability of an even larger 100bp hike has risen.

7 July 2021

Emerging Markets Economics Update

EM credit growth: where do the risks lie?

With the (usual) exception of Turkey, the strong rates of credit growth seen in some EMs including Brazil and Korea are unlikely to be sustained as policymakers have already started (or will soon turn to) tightening policy. The bigger concern is the extreme weakness of credit growth in other EMs such as Mexico and the Philippines, which threatens to further hold back economic recoveries.

6 July 2021

Latin America Data Response

Brazil Industrial Production (May)

The 1.4% m/m rise in Brazilian industrial production in May only partially reversed the falls in output in the three preceding months. And while surveys point to a stronger reading in June, the sector was probably a drag on q/q GDP growth over Q2 as a whole.

2 July 2021
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