The announcement by Egypt’s government of a raft of price hikes will help to offset the impact on the budget position from surging debt servicing costs and lay the ground for getting an improved IMF deal across the line. But there’ll be a near term hit to GDP growth. Elsewhere, PMI surveys across the Gulf showed that private non-hydrocarbon sectors ended 2023 on a stronger note and, if governments follow through with their spending plans, this should be sustained this year. Finally, drone strikes in Lebanon and Iraq as well as a bombing in Iran this week underscore that tensions in the region are escalating fast and there is a growing risk that the conflict between Israel and Hamas broadens.
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