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Middle East & North Africa Economics

OPEC+ pivot a headwind to Gulf economies

Despite the oil windfall providing scope for looser fiscal policy in the Gulf, the cuts to oil production in line with OPEC+ will weigh on economic growth in 2023. We expect that the Gulf economies will slow by more than we had previously anticipated. In North Africa, balance of payments strains should ease, and IMF assistance is increasing on the back of recent staff-level agreements reached with Egypt and Tunisia. The outlook will remain challenging as currencies need to weaken further, and monetary and fiscal policy need to be kept tight. Tunisia certainly faces the tougher task and we think the sovereign is still heading toward a debt restructuring.

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