The Shareek investment program launched in Saudi Arabia this week may help diversification efforts, but there is a risk it leads to a misallocation of resources that damages longer-run growth prospects. Elsewhere, the announcement that the UAE will produce the Sinopharm COVID-19 vaccine should help to maintain rapid vaccine progress there and help other countries in the region, allowing restrictions to be lifted sooner than we currently assume. Finally, while the decision by the IMF to increase the size of Jordan’s deal is positive news, the Fund is likely to demand further austerity, which will weigh on economic growth.
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