Morocco’s recovery to surprise on the upside

Morocco’s strong vaccine rollout and a rebound in the agricultural sector will support a robust recovery over the coming quarters. Although a slow return of tourists and fiscal consolidation will act as headwinds, we still think that GDP growth will be stronger than most expect over 2021-23.
Jason Tuvey Senior Emerging Markets Economist
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Middle East Economics Weekly

Lebanon and Tunisia face a tough task to tackle crises

The IMF confirmed this week that technical talks with Lebanon have restarted. But even before any sort of deal is reached, the government has the tough task of restructuring its defaulted Eurobond debt. And any lending from the Fund will come with a long list of reforms that will be difficult to implement. Elsewhere, Tunisia’s government has also begun talks with the IMF in hopes of securing a fresh deal and is reportedly in talks with the Gulf over financing too. But without reforms to address the deteriorating public finances, this funding would only kick the can down the road and delay a debt restructuring.

21 October 2021

Middle East Economics Update

What does the energy price surge mean for the Gulf?

Higher oil and gas revenues are likely to prompt a modest shift to looser fiscal policy in the large Gulf economies, although Bahrain and Oman will still need to stick to austerity. Meanwhile, if OPEC+ were to raise production quotas more quickly in response to the surge in global energy prices, that would pose a major upside risk to our above-consensus GDP growth forecasts.

20 October 2021

Middle East Economic Outlook

Gulf to outperform

Economic recoveries in the Gulf will continue to gather pace over the coming year on the back of successful vaccine rollouts and higher oil output, and our GDP growth forecasts lie above the consensus. Outside the Gulf, though, recoveries are likely to be slower, particularly in the more tourism-dependent economies. We think a sovereign default in Tunisia is more likely than not, and we have long-standing worries about public debt in Bahrain and Oman as well as Dubai’s corporate debts.

19 October 2021

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Emerging Europe Data Response

Turkey GDP (Q2 2021)

A strong rebound from May’s three-week lockdown meant that Turkey’s economy managed to expand by 0.9% q/q over Q2 as a whole and the early signs are that it carried this momentum into Q3. Robust growth and high inflation mean the central bank will hold off cutting rates until late this year.

1 September 2021

Middle East Economics Weekly

Egypt’s COVID outbreak, Tunisia’s president tightens grip

Fears are growing that Egypt is on the cusp of a fresh wave of COVID-19 driven by the Delta variant, but past experience suggests that restrictions will remain light touch and there is growing hope that the vaccine rollout will speed up in the coming months. Elsewhere, Tunisia’s President Kais Saied appears to be tightening his grip on power and leading the country back towards autocracy. As well as the risk that this pushes Tunisia closer to a debt restructuring, the fresh erosion of the country’s institutions will weigh on long-term economic prospects.

26 August 2021

Emerging Europe Economics Update

COVID-19 outbreaks diverge, booster shots rolled out

The past month has seen a growing divergence in COVID-19 outbreaks across the region, with cases still very low in Central Europe but surging in Israel and Turkey. Either way, it appears that restrictions will remain light touch and economic recoveries should stay on track. But studies showing that vaccine efficacy fades over time mean that booster shots look set to become the norm.

23 August 2021
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