Saudi Arabia’s 2019 budget was premised on optimistic assumptions regarding oil prices that are likely to be disappointed. If we’re right, fiscal austerity will probably return in mid-2019 and there’s a growing chance that the authorities push for deeper oil output cuts. Meanwhile, the Precautionary and Liquidity Line agreed between Morocco and the IMF this week suggests that the government will keep fiscal policy tight in the coming years and further loosen their grip on the dirham – although that is unlikely to result in a sharp devaluation.
Capital Economics’ offices are closed over the holiday period and will re-open on Wednesday 2nd January. The next MENA Economics Weekly will be published on Thursday 3rd January.
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