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Qatar gas, Morocco FX purchases, Tunisian turmoil

The continued rise in global gas prices will provide a substantial boost to Qatar's export revenues and provide scope for policymakers to loosen the purse strings to support the economic recovery. Elsewhere, moves by Morocco’s central bank suggest that the currency could appreciate further. Finally, Tunisia’s President Kais Saied's moves on Wednesday add to signs that his power grab is leading to a one-man rule. This will reinforce concerns about the future of Tunisia’s democracy and the government’s capacity to service its debts.
James Swanston Middle East and North Africa Economist
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Middle East Economics Weekly

Egypt: PIF steps up investment; CBE rate hike on the cards

Saudi Arabia’s Public Investment Fund has stepped up investments into Egypt this week that will help to ease external financing concerns. At the same time, electricity rationing will begin next week to free up more natural gas (which Egypt relies on for power) for export in an effort to narrow the large current account deficit. However, these measures will only provide a short-term reprieve and a weaker pound and steps to attract more direct investment will be key to putting the external position on a more sustainable footing. Meanwhile, rising inflation is likely to prompt the Central Bank of Egypt to resume its tightening cycle with a 50bp hike, to 11.75%, next Thursday.

11 August 2022

Middle East Data Response

Egypt Consumer Prices (Jul.)

Egypt’s headline inflation rate picked up to a three-year high of 13.6% y/y in July and we think it will remain above the Central Bank of Egypt’s target range until early 2024. Greater flexibility of the pound has taken some pressure off policymakers to hike interest rates aggressively, but we still think rates will rise a further 150bp, to 12.75%, by the end of this year.

10 August 2022

Middle East Economics Update

Qatar’s LNG boost still a few years away

With Russia tightening its squeeze on supply of gas to Europe, governments are turning their attention to other major gas exporters such as Qatar to try to fill the gap. But Qatar’s gas sector is already operating close to capacity and, while the North Field expansion that comes online from 2025 will boost the country’s LNG capacity by over 60%, this wouldn’t be a panacea for Europe’s gas shortages. In view of the wider interest, we are also sending this MENA Update to clients of our Energy and Emerging Europe Services.

9 August 2022

More from James Swanston

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

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 Weekly

Lebanon finally gets a government, Saudi education plans

The news that Lebanon finally formed a new government this week came as welcome relief amid the country’s economic, political and humanitarian crises. But there are still plenty of big hurdles to clear before the country emerges from its crisis. Elsewhere, the Saudi government is set to launch reform of the Kingdom’s education sector – an area of Vision 2030 we have long argued had been lagging.

16 September 2021
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