Saudi slowdown, Aramco IPO, IMF worries over Lebanon

GDP data released by Saudi Arabia this week showed that its economy slowed sharply in Q1 and, as the drag from oil output cuts intensifies and fiscal policy is tightened, growth will weaken further. Meanwhile, plans for a public listing of state-owned oil company, Aramco, may not have been binned after all. And the IMF’s latest assessment of Lebanon’s economy supports our view that the government will be forced to restructure its large debts in the coming years.
Jason Tuvey Senior Emerging Markets Economist
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Middle East Economics Weekly

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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.

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20 October 2021

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28 May 2021

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