Middle East

Middle East Economics Update

Middle East Economics Update

What does the energy price surge mean for the Gulf?

Higher oil and gas revenues are likely to prompt a modest shift to looser fiscal policy in the large Gulf economies, although Bahrain and Oman will still need to stick to austerity. Meanwhile, if OPEC+ were to raise production quotas more quickly in response to the surge in global energy prices, that would pose a major upside risk to our above-consensus GDP growth forecasts.

20 October 2021

Middle East Economics Update

Egypt’s recovery facing several headwinds

Egypt’s economy has emerged from the COVID-19 crisis relatively well, but the country’s lagging vaccine rollout, a slow return of international tourists and tight fiscal policy mean that the recovery from here is likely to be slow-going. GDP is likely to be around 3% below its pre-virus trend by end-2023.

6 October 2021

Middle East Economics Update

Dubai World Expo: near-term boost, debt risks linger

The long-awaited World Expo in Dubai will get underway next Friday and while there is likely to be some boost to the economy, this will be short lived. What’s more, as we have long warned, the Expo could leave high rates of overcapacity in Dubai’s real estate and hospitality sectors in its wake that could ultimately re-ignite concerns about the debts of the Emirate’s government-related entities.

23 September 2021
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Middle East Economics Update

Central Bank of Egypt keeps rates on hold for now

The Central Bank of Egypt (CBE) kept interest rates unchanged at Thursday’s MPC meeting amid rising price pressures. However, we still think that inflation will slow in the final months of this year and re-open the door for the CBE to resume its easing cycle.

17 September 2021

Middle East Economics Update

Jordan’s public finances a cause for concern

Jordan’s public finances deteriorated sharply last year and fiscal consolidation is needed to put the debt position back on a sustainable footing. Sticking to austerity may prove difficult given the economic and political backdrop and the composition of Jordan’s debt is also a cause for concern. But the likelihood of financial support from the Gulf and Western allies mitigates the near-term risk of default.

15 September 2021

Middle East Economics Update

Saudi economic recovery hits a bump in the road

Saudi Arabia’s economic recovery lost some steam in Q3 but, with virus restrictions easing further and oil production rising, GDP growth will strengthen over the rest of this year and next.

Middle East Economics Update

Morocco’s recovery to surprise on the upside

Morocco’s strong vaccine rollout and a rebound in the agricultural sector will support a robust recovery over the coming quarters. Although a slow return of tourists and fiscal consolidation will act as headwinds, we still think that GDP growth will be stronger than most expect over 2021-23.

Middle East Economics Update

A dive into Saudi Arabia’s balance of payments

A rise in oil prices has supported an improvement in Saudi Arabia’s current account position, which should be in surplus over the coming years. That, combined with signs that the sovereign wealth fund is slowing its international investments, will help to limit any further decline in the Kingdom’s foreign exchange reserves. The result is that the dollar peg is unlikely to come under pressure any time soon.

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