Lebanon’s debt swap, Egypt’s pound, Kuwait’s budget

The unravelling this week of a proposed debt swap by the Lebanese authorities suggests that, even once a government is formed, debt restructuring will be a drawn-out process. Elsewhere, the Egyptian pound has strengthened further this week, but it is starting to look overvalued and we expect it to give up its gains over the rest of this year. And the Kuwaiti 2020 budget unveiled this week reinforces our view that, despite having the strongest balance sheets in the Gulf, political infighting will prevent fiscal loosening.
Jason Tuvey Senior Emerging Markets Economist
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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.

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Egypt and UAE inflation, OPEC+, austerity in Algeria

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Nigeria’s recovery to remain stuck in first gear

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