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OPEC+ cuts and the Gulf, Saudi labour, Morocco-IMF

The surprise voluntary oil output cut by OPEC+ will directly shave 1-2%-pts off GDP growth in the region’s members this year, which has prompted us to revise down our 2023 GDP growth forecasts. That said, the bump to oil prices should provide greater scope for Gulf states to loosen fiscal policy and support non-oil sectors. The recently-released Q4 labour market figures out of Saudi Arabia highlight that the Kingdom’s efforts to improve female labour force participation are proving successful. Elsewhere, Morocco’s latest IMF deal should accelerate the shift to a more flexible exchange rate underpinned by an inflation-targeting framework.

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