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Delta variant poses biggest threat to non-Gulf economies

Concerns about the Delta variant of COVID-19 have grown over the past week but high vaccine coverage in the Gulf means that policymakers are unlikely to resort to harsh containment measures. Other parts of the region are more susceptible, adding to the reasons to think that recoveries there will lag behind in the coming years.
Jason Tuvey Senior Emerging Markets Economist
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Middle East Economics Weekly

Tunisia rate hike, Saudi budget data, Egypt privatisations

Tunisia’s central bank hiked interest rates this week with policymakers almost certainly having one eye on the country’s fragile external position. But we do not think that this will prevent sharp falls in the dinar and, in turn, a sovereign default. Elsewhere, Saudi Arabia posted its largest budget surplus since 2013 in Q1 on the back of high oil prices and continued tight fiscal policy. If oil prices remain high, though, the proverbial purse strings are likely to be loosened, supporting activity in the non-oil sector. Finally, more details emerged of Egypt’s forthcoming privatisation drive with the government planning to remove itself from a whole swathe of sectors.

19 May 2022

Middle East Economics Update

Saudi set for bumper GDP growth this year

Saudi Arabia’s economy grew at its fastest pace in a decade in Q1 and we think this strength will carry on over the rest of this year. The combination of rising oil output and the increasing likelihood of looser fiscal policy underpin our above-consensus forecast for the Kingdom’s economy to grow by 10% in 2022.

18 May 2022

Middle East Economics Update

Saudi inflation to stay in check, risks lie to downside

Headline inflation in Saudi Arabia rose to 2.3% y/y in April and we think that it will continue to accelerate over the coming months. Unlike in other parts of the emerging world, however, inflation will not surge to multi-year highs and, if anything, the risks to our inflation forecast lie to the downside.

18 May 2022

More from Jason Tuvey

Africa Economics Weekly

South Africa after the unrest

There are signs that the worst of the violence and unrest that has gripped South Africa this week may be over. Any hit to economic activity is unlikely to be long-lasting but the risk that the government’s austerity plans are watered down has increased.

16 July 2021

Emerging Europe Economics Update

CBRT in no rush to lower interest rates

Turkey’s central bank (CBRT) left interest rates on hold at 19.00% today and, with inflation set to rise further in July from a two-year high last month and the economy bouncing back quickly from the three-week lockdown in May, we think that an easing cycle is unlikely to begin until late this year.

14 July 2021

Africa Economics Update

Assessing the impact of the unrest in South Africa

There is clearly a lot of uncertainty over how the protests in South Africa in recent days will develop but there are reasons to think that the impact on economic activity will be towards the milder end of the spectrum. Perhaps a bigger risk is that the protests signal broader discontent with the current weakness of the economy, limiting the government’s ability to push through austerity and put the public debt position back on to a sustainable path.

13 July 2021
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