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Saudi Arabia’s government has been the largest EM issuer of hard currency debt over the past few years and this Update considers what will happen to the Kingdom’s public debt burden under different scenarios for oil prices. The overall conclusion is that …
20th January 2025
The Shape of the Fractured World in 2025 The share of the fracturing global economy that is accounted for by China and its geopolitical allies contracted in 2024, leaving it under a third the size of the US bloc at the start of 2025. This fall was in part …
17th January 2025
Gaza ceasefire: economic spillovers to fade Israel and Hamas provisionally agreed to a ceasefire deal on Wednesday. Israel’s PM Netanyahu today has accused Hamas of reneging on part of the deal. But if this can be overcome, it represents a major …
16th January 2025
Middle East & North Africa Chart Pack (Jan. '25) …
15th January 2025
Inflation eases and to remain low over 2025 This response has been updated with additional analysis of wholesale prices. Saudi Arabia’s headline inflation rate eased a touch from 2.0% y/y in November to 1.9% y/y in December and it is likely to hover …
Saudi’s bumper debt sale now a regular event Saudi Arabia’s National Debt Management Centre (NDMC) outlined its 2025 Borrowing Plan this week and the government has already got its debt issuance in motion. With budget deficits likely over the coming …
9th January 2025
Inflation to continue on its downward path, rate cuts on the way Egypt’s headline inflation rate slowed from 25.5% y/y in November to 24.1% y/y in December, its slowest pace in two years. With earlier falls in the pound falling out of the annual price …
The improvement in Egypt’s macroeconomic stability since March’s policy shift has resulted in a surge in capital inflows on a similar scale to that which followed the 2016 devaluation. But if signs emerge that the authorities are delaying reforms, there’s …
8th January 2025
The Cold War was defined by geopolitical blocs – the Soviet or Eastern bloc against the Western bloc. Geopolitics retreated with the collapse of the Soviet Union. The period from the early-1990s to the early-2010s was instead an era of globalisation: most …
7th January 2025
Donald Trump’s second term could redraw the global geopolitical map. A sustainable “Grand Bargain” with China, warmer relations with Russia, or a breakdown in the relationship between the US and its traditional allies could each reshape supply chains and …
A softer end to 2024 December’s batch of PMIs declined for the most part across the Gulf but we doubt that the strength of non-oil activity will be sustained in 2025, particularly in Saudi Arabia and Kuwait. Elsewhere, Egypt’s PMI fell to an eight month …
6th January 2025
Saudi inflation to fall back over 2025 Saudi inflation rose further in November but there were tentative signs that some of the recent drivers of higher price pressures are fading and we expect the headline rate to drop back towards 1% by end-2025. The …
19th December 2024
Saudi Arabia’s constrained approach to oil policy is here to stay until April and, coupled with the turn to fiscal consolidation, means growth will pick up by less than others expect in 2025. The final estimate of Saudi GDP showed that the pace of …
OPEC+ alters Gulf’s economic outlook Following our previous Weekly , OPEC+ announced that it would be pushing back the start date of when it will unwind oil production cuts to April 2025 and that the pace of increase will be slower than we had previously …
12th December 2024
Overview – GDP growth in the Middle East and North Africa will accelerate in 2025 on the back of higher oil production in the Gulf. The UAE will be the Gulf’s top performing economy and, elsewhere, we expect that growth in Egypt and Morocco will …
11th December 2024
Disinflation taking hold before sharp easing of price pressures in Q1 This report has been updated with additional analysis since first published. Egypt’s headline inflation rate slowed from 26.5% y/y in October to 25.5% y/y in November and, with falls in …
10th December 2024
The fall of Syria’s President Bashar al-Assad has been warmly received by many, at least outside Russia and Iran, but a key lesson from the other Arab Spring countries is that hopes for a shift towards a liberal, Western-style democracy are likely to be …
9th December 2024
While today’s decision by OPEC+ to delay the unwinding of some of its oil production cuts until April 2025 buys the group some time, the backdrop of weak global oil demand means that it could easily find itself back in a similar position in three months’ …
5th December 2024
Syria’s rebel advance tests MENA’s geopolitics Over the past week, Syrian rebel forces have retaken significant amounts of territory from President Bashar al-Assad’s regime with little resistance so far. It’s unclear whether the rebels will make further …
While energy market fundamentals point to oil prices falling a bit further and prices of European natural gas and Asian LNG remaining higher than before the Russia-Ukraine war, the uncertain geopolitical backdrop is a major wildcard for energy markets. Of …
3rd December 2024
Gulf ending the year on a stronger note November’s batch of PMIs showed an increase all of the Gulf economies, although there remained some underlying signs that non-oil activity is softening. Elsewhere, Egypt’s PMI improved a touch as price pressures …
We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. What are Trump’s motives for threatening tariffs and will he follow through? Trump has spoken about using …
29th November 2024
Economic spillovers of regional conflict may fade The Israel-Hezbollah ceasefire agreed this week may present a stepping stone towards broader de-escalation of the regional conflict. For Egypt and Jordan, among the countries most directly affected by …
28th November 2024
Headline GDP growth in the Gulf economies will strengthen in 2025 as oil output cuts are unwound. But lower oil prices are prompting a turn to fiscal consolidation, notably in Saudi Arabia, which will cause growth in non-oil sectors to slow. Outside of …
27th November 2024
The economic impact of the Israel-Hezbollah ceasefire hinges on whether the deal holds and whether it sets the stage for a broader de-escalation of the regional conflict. If it does, that would allow Lebanon’s shattered economy to recover and ease fiscal …
President-elect Donald Trump’s first threatened tariffs since the election are designed to extract concessions on drug trafficking and illegal border crossings, which means it may be possible for the countries targeted – Canada, Mexico and China – to head …
26th November 2024
We discussed the global impact of higher tariffs in a Drop-In on Tuesday, 26th November. Click here to watch the 20-minute online briefing. In this Focus, we construct a framework to explore the channels through which an import tariff works, which we use …
25th November 2024
Egypt’s policy agenda shifts to long term reforms With Egypt’s macroeconomic stability restored, officials are starting to turn their attention to longer term reforms and number one on the list appears to be reinvigorating the stalled privatisation drive. …
21st November 2024
Morocco’s weaker economic performance this year is likely to be a blip. Buoyed by low and stable inflation, looser monetary policy, and a burgeoning manufacturing sector, we expect Morocco’s economy to grow by around 5% in 2025 and 2026, which is faster …
Stronger inflation rules out rate cut before end-24 The third successive rise in Egypt’s headline inflation rate has all but quashed hopes that the central bank will cut interest rates before the end of this year. But, as we have long argued, a sharp …
14th November 2024
An oil market that has mostly looked through a year of Middle East conflict now faces fresh, Trump-shaped, uncertainty. The president-elect’s campaign pledges on everything from Iran and Israel to climate policy to household energy bills appear to raise …
Inflation rises at fastest pace in over a year This response has been updated with additional analysis since first published Saudi Arabia’s headline inflation rate accelerated from 1.7% y/y in September to 1.9% y/y in October, a fourth consecutive rise …
It seems likely that the US will step up sanctions enforcement on Iran’s oil trade, though the oil market should be able to absorb this. The much greater risk for oil prices is a more dramatic shift in the pro-Israel/anti-Iran stance that broadens the …
12th November 2024
The victory for Donald Trump in the US election will have major ramifications for the Middle East. (You can read all of our US election coverage here .) For the most part, the Middle East should be shielded from any direct impact if Trump pushes ahead …
7th November 2024
A positive start to Q4 for the Gulf This response has been updated with additional analysis since first publication. October’s batch of PMIs showed an increase across all of the Gulf economies, although there remained underlying signs that non-oil …
5th November 2024
The US election next week is likely to have major ramifications for geopolitical ties, trade, and financial markets in the MENA region. (All our analysis on the impact of the US election on EMs can be found on our dedicated webpage here .) Attention in …
31st October 2024
Pace of expansion starts to soften The 0.8% q/q rise in Saudi GDP in Q3 is likely to be followed by further steady increases, but growth will be driven increasingly by higher oil output while there are signs that the non-oil sector is cooling off. The …
Headline GDP growth in the Gulf economies will strengthen in 2025 as oil output cuts are unwound. But lower oil prices will prompt a turn to fiscal consolidation in most of the Gulf, causing growth in non-oil sectors to slow. Elsewhere, balance sheets in …
30th October 2024
Al-Sisi demands review with IMF Comments from Egypt’s President al-Sisi over the past week pushing back against the pace of reforms under the current IMF deal has alarmed investors a little, but the bigger picture is that Egypt’s economy is in a far …
24th October 2024
A victory for Donald Trump in the US election would probably result in higher US Treasury yields and a stronger dollar. That’s an environment in which central banks in EMs with strained balance sheets (notably Turkey) could hike rates and others that are …
Saudi Arabia’s economy is making a steady recovery as solid growth in the non-oil sector offsets low oil production. Growth will continue to pick up over the coming quarters, but the drivers will change. Oil output is set to rise, potentially sharply, …
The boom in bank lending in Qatar in the 2010s has unwound so far in a relatively orderly manner. Banks are well capitalised and are able to absorb a far greater rise in non-performing loans than we have seen. Still, there are lingering vulnerabilities …
22nd October 2024
BRICS+ to meet with a notable absentee Next week’s BRICS+ summit in Russia is likely to focus on the group’s further expansion after Egypt and the UAE (along with several other countries) joined last year. Notably, however, Saudi Arabia – which was also …
17th October 2024
Several EMs have reached provisional agreements with creditors to restructure their sovereign debts in recent months, including Zambia, Ukraine, Sri Lanka and Ghana. In principle, restructurings should pave the way for improved fiscal positions, stronger …
We held an online Drop-In session last week to discuss progress on Saudi Arabia’s Vision 2030 reform programme and the implications for the Kingdom’s economic outlook. (An on-demand recording is available here and an in-depth Focus here .) This Update …
15th October 2024
Inflation edges higher This response has been updated with additional analysis. Saudi Arabia’s headline inflation rate rose a touch from 1.6% y/y in August to 1.7% y/y in September, a third consecutive increase and the fastest pace of inflation since …
Although the focus in the oil market has shifted to geopolitical risks and potential short-term supply disruptions, just as importantly, we think the possibility that Saudi Arabia could open the floodgates has increased in recent weeks alongside reports …
14th October 2024
Saied’s second term could prove a messy one In a no shock result, Kais Saied secured a second term as Tunisia’s president by a landslide. His first five years in power were typified by a shift back to autocracy and shunning necessary reforms. The next …
10th October 2024
Inflation ticks up again, CBE to wait until Q1 ’25 before first rate cut The second consecutive rise in Egypt’s headline inflation rate, to 26.4% y/y in September, on the back of electricity and fuel price hikes further reduces the chances of a first …
9th October 2024
Saudi Arabia’s 2025 Pre-Budget statement provided the first clear signs that officials are accepting that they need to pare back on some of their ambitious spending goals, which supports our view that non-oil GDP growth is likely to slow over the next few …
8th October 2024
