Egypt budget, Bahrain stimulus, Dubai property

Figures out of Egypt this week showed the budget deficit has narrowed this year, highlighting the commitment to keep debt on a downwards trajectory but at the cost of a weaker recovery. In contrast, Bahrain’s government looks set to continue providing fiscal support during its recovery, although this may raise further concerns over the country’s fragile balance sheet. Elsewhere, Emaar – the largest property developer in Dubai – announced it would halt construction on new projects, which might help to restore balance to the Emirate’s property market.
James Swanston Middle East and North Africa Economist
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Middle East Economics Weekly

Omicron, tourism and the oil market

Low vaccine coverage and large tourism sectors mean that the non-Gulf economies are particularly vulnerable to the emergence of the Omicron variant. Meanwhile, the drop in oil prices and the likelihood that OPEC+ raises oil output more slowly than previously envisaged has increased the downside risks to our GDP growth forecasts for the Gulf.

2 December 2021

Middle East Economics Update

Saudi economy set for a strong end to the year

The economic recovery in Saudi Arabia has picked up pace and should end the year on a strong note. The emergence of the Omicron variant has clouded the outlook, but for now we expect economic growth in the Kingdom to strengthen in 2022 on the back of rising oil output.

2 December 2021

Middle East Chart Book

MENA and the Omicron risks

The Middle East and North African economies are potentially among the most vulnerable to the fallout from the Omicron strain of COVID-19. The North African economies as well as Lebanon and Jordan have low vaccination rates and large tourism sectors, leaving them exposed to the risk of tighter restrictions and curbs on international travel. In the Gulf, vaccination rates are much higher and, Dubai aside, tourism sectors are relatively small. But the fall in energy prices could prompt governments to hold off loosening fiscal policy. And producers may raise oil output more slowly, which would weigh on economic growth.

30 November 2021

More from James Swanston

Middle East Data Response

Egypt Consumer Prices (Jun.)

Egypt’s headline inflation rate edged up to 4.9% y/y in June and is likely to increase further over the coming months. Against this backdrop, we think the Central Bank of Egypt (CBE) will keep interest rates on hold until later in the year.

8 July 2021

Middle East Data Response

Whole Economy PMIs (Jun.)

June’s whole economy PMIs for the Gulf were a mixed bag, although one common thread was that weaker external demand offset a pick up in domestic demand. Strong vaccine rollouts mean that most virus restrictions will be lifted in the coming months, paving the way for a further pick-up in domestic activity.

5 July 2021

Middle East Economics Weekly

Saudi transport & labour market, Egypt CA deficit

The National Transport and Logistics Strategy launched in Saudi Arabia this week is the latest effort to boost the Kingdom’s non-oil sector, but it will raise more concerns whether resources are being misallocated. Meanwhile, the Kingdom’s unemployment rate fell further in Q1, which has been mostly driven by improving labour market outcomes for Saudi women – an encouraging sign that social reforms are having positive effect. Elsewhere, the widening of Egypt’s current account deficit to its highest level in nearly four years in Q1 reinforces our concerns that the pound is looking overvalued.

1 July 2021
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