Recent figures suggest that the downturn in the UAE’s real estate sector has bottomed out but we still hold concerns that increasing supply will exacerbate overcapacity and put further strain on banks’ balance sheets. Elsewhere, a recent severe COVID-19 outbreak in Tunisia prompted a strict week-long lockdown to slow the spread of infections and, amid a struggling vaccine rollout, a loss of tourism this summer will further delay the recovery and reinforce fears about the country’s large twin deficits. Finally, remittances into MENA grew last year and are likely to increase further over the coming years as recoveries get underway, although labour nationalisation programmes in the Gulf present a downside risk.
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