Remittance slump adds to economic headwinds

The measures to contain the coronavirus outbreak have shut down economies across the world, leading to job losses and falls in income. Migrant workers appear to have felt the brunt of this and the resulting drop in remittances will hit the economies in North Africa, Lebanon, and Jordan hard, holding back economic recoveries and adding to strains in the balance of payments.
James Swanston Middle East and North Africa Economist
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Middle East Economics Weekly

Oil and Gulf fiscal policy, Egypt joins GBI-EM, Tunisia

We think that the recent rally in oil prices is likely to be short lived and, as prices fall back, the window for governments in the Gulf to loosen fiscal policy will shut. Elsewhere, Egypt’s inclusion in JP Morgan’s GBI-EM bond index at the end of the month could boost capital inflows, but also cause external imbalances to increase. Finally, despite some support from Saudi Arabia this week, the Tunisian government will still need to pass much-needed fiscal consolidation to repair its balance sheets. Otherwise, it will continue to edge closer to a sovereign default.

13 January 2022

Middle East Data Response

Saudi Arabia Consumer Prices (Dec.)

Saudi inflation edged up to 1.2% y/y in December and we think that the headline rate will drift a little higher over the first half of this year before stabilising at around 1.0-1.5% over the rest of 2022 and 2023. Drop-In: Neil Shearing will host an online panel of our senior economists to answer your questions and update on macro and markets this Thursday, 13th January (11:00 ET/16:00 GMT). Register for the latest on everything from Omicron to the Fed to our key calls for 2022. Registration here.

13 January 2022

Middle East Economics Update

What to expect in MENA in 2022

We think that GDP growth in the Gulf will be stronger than most expect this year on the back of rising oil output. Elsewhere, we expect a larger depreciation of the Egyptian pound than most anticipate and, if anything, there is a growing risk of an even sharper adjustment. Meanwhile, Tunisia will continue along the path towards a sovereign default. And bad loans look set to rise in banking sectors in Qatar and the UAE, causing credit conditions to tighten.

12 January 2022

More from James Swanston

Middle East Economics Update

Saudi: easing of restrictions paves way for H2 recovery

Saudi Arabia’s economy suffered a small downturn in Q1 and the recovery so far this quarter has been slow-going. But, with the vaccine roll out picking up pace and restrictions being relaxed, coupled with rising oil output, the recovery is likely to gather momentum over the second half of this year.

2 June 2021

Middle East Economics Weekly

Bahrain COVID-19 surge, Oman strikes, OPEC+ meeting

The recent surge in COVID-19 cases in Bahrain – which comes despite a rapid vaccine rollout – will delay its economic recovery and serves as a warning that other countries’ vaccination campaigns have much further to run. Elsewhere, protests in Oman over the past week prompted the government to row back on some of its austerity measures, which is likely to raise concerns about rising public debt and the dollar peg. Finally, next week’s OPEC+ meeting is likely to be a straightforward affair, but we will be keeping a close eye on any comments regarding how the cartel will potentially accommodate higher Iranian oil output.

27 May 2021

Middle East Economics Update

Tourism set for uneven recovery

Strong vaccine rollouts in the Gulf and Morocco have allowed for an easing of travel-related restrictions but there is still a long way to go and recoveries in tourism sectors are likely to be slow-going. And in the rest of the region, struggling vaccination programmes will further delay the re-opening of tourism sectors.

26 May 2021
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