The recovery in the Middle East and North Africa will gather pace over the rest of this year and in early 2019, but growth will peak sooner than most expect. Egypt’s cyclical upturn should continue and we expect it to be a regional outperformer. In Saudi Arabia, while political tensions and possible sanctions will weigh on financial markets, the macroeconomic impact should be limited. In the near-term, growth in the Kingdom and the rest of the Gulf will strengthen on the back of rising oil output and fiscal loosening. However, these tailwinds are likely to fade from the middle of next year, weighing on regional growth – our GDP growth forecast for 2020 is well below the consensus.
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