Filtered by Subscriptions: Middle East & North Africa Economics Use setting Middle East & North Africa Economics
The slowdown in Saudi GDP growth in Q4, to just 2.0% y/y, provides the first evidence that the plunge in oil prices has caused growth to soften. But so far, there are no signs of a collapse in output. … Saudi Arabia GDP …
20th January 2015
The small fall in the Egyptian pound in the past couple of days is significant given that the central bank had kept a tight grip on the currency since last summer and we think that the pound’s depreciation has further to run. No official explanation has …
19th January 2015
In a surprise decision today, Egypt’s central bank (CBE) became the latest in the emerging world to cut interest rates. Although the slide in oil prices is unlikely to have much direct impact on domestic inflation, it has helped to ease strains in the …
15th January 2015
Saudi Arabia’s inflation rate fell to an eight-year low of 2.4% y/y in December. But we suspect that the big fall in inflation is now behind us and the headline rate may even edge up over the coming years. … Saudi Arabia Consumer Prices …
Our GDP Tracker suggests that growth in the Saudi economy eased towards the end of last year, but there aren’t any signs that the plunge in oil prices has caused activity to collapse. Looking ahead, we expect growth to soften further as fiscal policy …
14th January 2015
We’ve written extensively in recent months about the losses the Gulf economies face in light of the plunge in oil prices. But in this Watch we explain why the North African economies of Egypt, Morocco and Tunisia stand to benefit from a period of lower …
13th January 2015
We’ve argued for some time that the Gulf economies are set to run a current account deficit this year for the first time in over a decade, and the latest plunge in oil prices means this deficit could come in at almost 10% of GDP – something not seen since …
8th January 2015
The rise in Egyptian inflation last month, which took it back into double-digits, rules out any possibility of an interest rate cut by the Central Bank of Egypt at next week’s meeting. … Egypt Consumer Prices …
The rise in December’s whole economy PMIs suggests that, in spite of the plunge in oil prices at the end of last year, economic activity in the Gulf has held up reasonably well. Meanwhile, Egypt’s economy appears to have ended last year on a slightly …
6th January 2015
Saudi Arabia’s 2015 budget statement doesn’t provide a clear steer about the path for actual government spending. Reading between the lines, it looks like the authorities will keep spending restrained this year, but there’s no sign that they will tighten …
5th January 2015
The recent plunge in Dubai’s stock market, coming alongside a drop in oil prices, has rekindled fears that the Emirate could face renewed problems with its large corporate debts. For our part, we think Dubai’s debt problems are far from resolved. But for …
17th December 2014
In spite of small rises today, equity markets in the Gulf have tumbled over the past month and all of the gains made earlier this year have now been wiped out. While we suspect that the big falls have probably now taken place, with lower oil prices here …
15th December 2014
The slump in oil prices has caused the Gulf’s equity markets to tumble, but the region’s governments still seem to be unfazed. Oman aside, no country has announced cuts in public spending. And Saudi Arabia’s Oil Minister has once again shrugged off calls …
11th December 2014
The fall in Saudi Arabia’s inflation rate in November to a two-and-a-half year low probably marks the trough and we expect it to rise gradually to 3.0-3.5% over the coming year. … Saudi Arabia Consumer Prices …
The slump in oil prices has caused concerns to emerge about the exposure of financial institutions to energy companies, but for banks in the Gulf this risk seems small. They are more vulnerable to a period of low oil prices if it results in weaker income …
10th December 2014
Egyptian inflation fell sharply last month on the back of easing food price pressures. If inflation remains in single digits over the coming months, it could prompt the Central Bank of Egypt to cut interest rates in the first half of next year. … Egypt …
Our GDP Tracker suggests that the Saudi economy started Q4 on a slightly weaker note. We don’t think that the latest fall in oil prices will cause growth to collapse but with fiscal policy set to become less supportive, we do think growth will soften …
9th December 2014
Last month’s drop in the whole economy PMIs for the Gulf economies appears to have been driven by weaker domestic demand. One explanation for this is that the continued slide in oil prices has weighed on sentiment. Meanwhile, the further fall in Egypt’s …
4th December 2014
The recent fall in oil prices, if sustained, will effectively wipe out the Gulf’s current account surplus. This shouldn’t pose too many problems for these economies. Even if oil prices fall further, large FX reserves could finance current account …
2nd December 2014
The Central Bank of Egypt left its benchmark interest rate unchanged at 9.25% today and, with growth picking up and inflation still high, it looks unlikely that July’s rate hike will be reversed any time soon. Equally, however, policymakers don’t appear …
27th November 2014
Comments ahead of today’s OPEC meeting, playing down calls for a cut in the cartel’s output target, suggest that the Gulf States aren’t too alarmed by the recent slide in oil prices. Indeed, Saudi Arabia’s Oil Minister, Ali al- Naimi , has explicitly said …
Low oil prices have continued to take their toll on equity markets in the Gulf. Meanwhile, pressure on the Egyptian pound has intensified over the past month and we think the authorities will need to loosen their grip on the currency sooner rather than …
25th November 2014
Egypt’s tourism sector has turned the corner in recent months and, if this improvement can be sustained, we estimate that it might result in additional revenues of as much as $3.3bn (1.2% of GDP) over the next twelve months. However, lingering security …
20th November 2014
Our GDP Tracker suggests that growth in Saudi Arabia’s economy stabilised in Q3. The oil sector was a drag on the economy, but this was offset by stronger growth in the non-oil sector. Going forward, we think that economic growth is likely to soften. A …
19th November 2014
Saudi Arabia is likely to resist pressure from other OPEC members to cut oil output in an effort to arrest the recent slide in prices. After all, the Saudi economy is in a stronger position to withstand a period of lower oil prices than many other members …
17th November 2014
The sharp fall in oil prices in recent months has led some to call into question the sustainability of the Gulf’s dollar pegs. However, we think the risk of currency devaluation is relatively small. … Gulf dollar pegs under little threat from lower oil …
13th November 2014
The fall in Saudi Arabia’s inflation rate in October suggests that, for now at least, price pressures in the economy are limited. … Saudi Arabia Consumer Prices …
It’s been a year since the Saudi Arabian authorities launched a crackdown on illegal migrants working in the Kingdom. In this Watch, we assess what impact that the crackdown, as well as the government’s other labour market policies, have had on the Saudi …
12th November 2014
The increase in Egyptian inflation last month should not ring too many alarm bells. In fact, it can be almost entirely explained by a sharp rise in education inflation ahead of the new academic year. … Egypt Consumer Prices …
10th November 2014
The sharp slide in oil prices since the summer won’t cause a major headache for the Gulf States, but it does reinforce the point that these economies are set to lose some steam over the coming years. Falling oil revenues mean that government spending …
6th November 2014
The Egyptian pound has held steady in recent months but we think that policymakers will need to loosen their grip on the currency in the not-too-distant future. All told, we forecast the pound to drop by 10% against the dollar, to 8.0/US$, by the end of …
5th November 2014
September’s Brazilian industrial production data suggest that the sector remained a drag on the overall economy in the third quarter and, with both domestic and external demand set to remain weak, it is unlikely to take over as a driver of growth in the …
4th November 2014
The slide in oil prices this month has raised concerns in some quarters that the Gulf States will need to tighten fiscal policy. But while the prospect of this has been talked about in Oman, lower oil prices have received a muted reaction in the rest of …
30th October 2014
Growth in the Saudi Arabian economy appears to have stabilised in Q3, as a pick-up in activity in the non-oil sector offset a further slowdown in the oil sector. But in spite of the relative strength of the recent figures, we expect growth to slow further …
28th October 2014
The victory for Nidaa Tounes in Tunisia’s parliamentary election is likely to raise hopes that economic reforms are in the pipeline. Perhaps more importantly, the fact that the election passed smoothly and that there is a growing consensus among …
27th October 2014
In contrast to the Gulf, the rest of the MENA region stands to gain from the recent fall in oil prices. That being said, a period of low oil prices alone won’t be sufficient to reduce these economies’ large twin budget and current account deficits …
23rd October 2014
Despite recovering a little in recent days, it’s been a torrid month for stock markets across the MENA region. In part, this has reflected the broader sell-off in EM financial markets. But in the Gulf, this has been compounded by the sharp fall in oil …
22nd October 2014
Concerns that the recent fall in oil prices could lead to another “lost decade” for the Gulf, similar to the 1980s, are probably overdone. The region’s large accumulated savings mean that most countries are in a much stronger position to weather a period …
21st October 2014
The Central Bank of Egypt’s decision to keep interest rates on hold today came as little surprise. Inflation remains high but policymakers are undoubtedly wary of tightening monetary policy due to fears of stifling the economic recovery. And with …
16th October 2014
The ongoing slide in oil prices doesn’t pose too much of a threat to the Gulf economies. But it does reinforce the point that a key driver of the region’s economies over the past decade is weakening. We don’t expect growth to collapse, although we do …
In aggregate, inflation in the Gulf countries has remained stable over the past few months, helped by easing food inflation. But there are signs that core price pressures are starting to build, particularly in the UAE and Qatar, and we expect inflation to …
13th October 2014
Saudi Arabia’s fiscal position looks set to swing from surplus to deficit in the near-future. This would by no means be a disaster as the authorities could easily finance budget shortfalls for many years to come. However, it does mean that the government …
9th October 2014
Upcoming elections in Tunisia are another important step along the country’s long and bumpy path to democracy. If the elections pass smoothly, as seems likely, this should at the very least provide a near-term boost to growth. But perhaps more …
8th October 2014
September’s ‘whole economy’ PMI data suggest that non-oil sectors in the Gulf, and in Saudi Arabia in particular, ended the third quarter on a strong note. Meanwhile, the survey provided further evidence that Egypt’s fragile economy has gathered pace in …
7th October 2014
Moroccan GDP growth continued to be affected by a slump in the agricultural sector in Q2. But other parts of the economy are performing well and we still think that Morocco will be North Africa’s best performing economy over the coming years. … Morocco’s …
1st October 2014
… Egypt’s economy shifts up a gear …
30th September 2014
Having suffered following last summer’s “second revolution”, the Egyptian economy is finally starting to gather steam. Activity has been buoyed by recent political stability and the government’s Gulf-funded stimulus packages. Indeed, industrial production …
25th September 2014
The Saudi Arabian economy slowed sharply between Q1 and Q2, largely due to weakness in the oil sector. The data also provided further signs that Saudi consumers may be struggling. Looking ahead, it’s unlikely that the oil sector will be able to match the …
24th September 2014
Large energy subsidies in the GCC lead to a number of distortions in their economies, including smaller current account and fiscal surpluses as well as weaker investment in the non-hydrocarbon sector. Even so, subsidies remain a key part of the Gulf’s …
23rd September 2014
The latest headline trade figures from Egypt suggest that the country’s trade deficit has narrowed sharply over the past year, reducing a key economic vulnerability. However, by taking a closer look at the data, it seems that there is less to this than …
18th September 2014
