North Africa getting back on its feet

Three years on from the “Arab Spring” uprisings, the tide is turning in favour of the economies of North Africa. Admittedly, there are still many challenges, not least reining in large twin current account and fiscal deficits. Nonetheless, a gradual return to political stability in Egypt and Tunisia should support activity there, while exports are likely to pick up on the back of the modest recovery in the global economy. Overall, we expect growth to gradually strengthen over the next couple of years. By contrast, we think growth in the Gulf is likely to slow as the past decade’s boom in hydrocarbon production fades and fiscal policy becomes less supportive. The big picture is that growth in North Africa could surpass that in the Gulf come next year.