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Saudi Arabia Consumer Prices (Oct.)

Saudi inflation edged higher to 0.8% y/y in October and will probably continue to drift upwards over the coming months. Overall, though, we expect price pressures to remain subdued, at 1.0-2.0% over the course of 2022-23, compared with many other parts of the world.
Jason Tuvey Senior Emerging Markets Economist
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Middle East Economics Update

What Sheikh Khalifa’s passing means for the UAE

The passing of the UAE’s President Sheikh Khalifa bin Zayed al Nayhan today is unlikely to alter the economic outlook with GDP set to grow rapidly amid stronger oil output and looser fiscal policy. That said, the next president will face several challenges, including the country’s relationship with OPEC+, ensuring the UAE remains the region’s leading financial and logistics hub and dealing with Dubai’s debts.

13 May 2022

Middle East Economics Weekly

Egypt’s budget, UAE welfare, Lebanon election

Egypt’s draft budget reiterated the government’s commitment to keeping fiscal policy tight but, with debt servicing costs rising sharply and the currency set to weaken, there are increasing concerns over Egypt’s debt dynamics. Elsewhere, the UAE unveiled an unemployment insurance scheme this week that will benefit both Emiratis and non-Emiratis as officials seek to ward off competition for the country's role as the region's financial and trading hub. Finally, elections in Lebanon this weekend are unlikely to provide fresh impetus to efforts to secure IMF financing. EM Drop-In (17th May): Do current EM debt strains point to a repeat of the kinds of crises seen in the 1980s and 1990s? Join our special briefing on EM sovereign debt risk on Tuesday. Register now.  

12 May 2022

Middle East Data Response

Egypt Consumer Prices (Apr.)

Egypt’s headline inflation rate jumped to a near-three year high of 13.1% y/y in April on the back of the spillovers from the war in Ukraine and effects of the devaluation of the pound. Inflation will continue to rise over the rest of this year and prompt the central bank (CBE) to hike interest rates further – we have pencilled in 350bp of hikes by the end of this year, to 12.75%, which is more than the consensus expects. China Drop-In (12th May, 09:00 BST/16:00 SGT): Join our China and Markets economists for a 20-minute discussion about near to long-term economic challenges, from zero-COVID disruptions to US-China decoupling. Register now.

10 May 2022

More from Jason Tuvey

Emerging Europe Economics Update

All eyes on CBRT as Turkish lira continues to tumble

There has been no let up for the Turkish lira today and all eyes are turning to the central bank’s interest rate decision tomorrow. Policymakers’ increased tolerance to falls in the lira as well as pressure from President Erdogan mean that an interest rate cut of 100bp or so still seems likely but a much larger reduction would clearly send Turkish financial markets into a tailspin. Even a hold (or a rate hike) may only provide short-term relief for the currency as much will then depend on the president’s reaction and whether he decides to part ways with another central bank governor.

17 November 2021

Emerging Europe Economics Update

Turkey: threat of currency crisis continues to grow

The Turkish lira has remained under significant pressure at the start of this week and there is a growing risk that the central bank’s continued obedience to pressure from President Erdogan for interest rate cuts results in sharp and disorderly falls in the currency over the coming days and weeks. That would cause inflation to rise even further and broader financial conditions to tighten. Strains would also build in the banking sector and, while it would require a prolonged bout of market stress before a wave of bank defaults became a serious threat, a credit crunch would almost certainly ensue.

16 November 2021

Emerging Europe Data Response

Turkey Industrial Production & Retail Sales (Sep.)

Turkey’s activity data for September were the proverbial mixed bag with industrial production falling back but retail sales putting in another robust performance. On balance, the data suggest that Turkey’s economy expanded by around 1.5% over Q3 as a whole.

12 November 2021
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