The hit to tourism in the region from the COVID-19 pandemic finally appears to be over. Receipts and arrivals are now back to, or even above, seasonal norms in almost all countries. This will be welcome news for Saudi Arabia as the annual Hajj pilgrimage gets underway. An anticipated 2.5mn are set to visit the Kingdom, more than double the 2022 figure. Elsewhere, the return of tourists will provide those economies suffering balance of payment strains (Egypt, Jordan, and Morocco) with crucial hard currency receipts. Tunisia is an exception to this regional story. Arrivals remain below pre-pandemic levels and ongoing political turmoil may deter tourists. This cements our view that the dinar could experience a disorderly adjustment and exacerbate the risk of a sovereign default.
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