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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
The recent sharp drop in oil prices is unlikely to be a major headache for the Gulf economies although, if sustained, it will mean that there will be less room for fiscal policy to provide the same support to growth as it has done in recent years. …
16th September 2014
In his first 100 days in office, Egypt’s President al- Sisi has made more progress in tackling the country’s economic problems than many, including ourselves, had expected. In particular, his government has cut subsidies and also started to address the …
15th September 2014
Algerian President Abdelaziz Bouteflika’s re-election in April seemed to mark a return to business as usual for the economy. However, Algeria’s growth model is looking increasingly unsustainable. If, as we expect, global energy prices fall over the …
10th September 2014
Our GDP Tracker suggests that the Saudi economy slowed further at the start of Q3 as growth in the oil sector continued to ease, while activity in the non-oil sector remained weak by past standards. … Saudi slowdown continues at the start of …
8th September 2014
The past month has brought further news that Dubai’s government-related entities, which were at the heart of the Emirate’s crisis in 2009, are tackling their debt problems. But while these latest developments provide grounds for optimism, as we argue in …
4th September 2014
The pick-up in Egypt’s ‘whole economy’ PMI last month suggests that the economy has continued to make a gradual recovery from last summer’s “second revolution”. Meanwhile, non-oil sectors in the Gulf appear to be enjoying a period of robust activity, …
3rd September 2014
The Egyptian central bank’s decision to keep interest rates on hold today appears to confirm that July’s rate hike was a one-off in response to higher inflation following the government’s recent decision to raise energy prices. However, inflation should …
1st September 2014
Over the past month Dubai’s government-related entities (GREs), which were at the heart of the Emirate’s crisis in 2009, have made further efforts to tackle their huge mountains of debt. The recovery in the real estate sector over the past 18 months has …
28th August 2014
A slump in agricultural output has weighed heavily on Morocco’s economy since the start of this year. However, exports are now picking up on the back of stronger external demand while the boom in the nascent car sector is showing little sign of ending. As …
26th August 2014
Our GDP Tracker suggests that growth in the Saudi economy slowed to around 4.3% y/y in Q2 from 4.7% y/y in Q1. This was driven by weakness in the oil sector, but it looks like growth in the non-oil sector stabilised from the first quarter. … Saudi growth …
21st August 2014
Equity markets in the Gulf have been among the best performers in the world over the previous year, but they’ve flat-lined during the past month. The one exception is Saudi Arabia, where the stock market has been buoyed by the announcement that it will be …
19th August 2014
The latest data suggest that Saudi consumer spending remains weak by past standards, but it does at least look like the recent slowdown may now have bottomed out. … Saudi consumer spending may be …
14th August 2014
There are growing hopes that the recent return to political stability in Egypt will trigger a revival in bank lending to the private sector. But we think this optimism may be overdone. A heavy burden of nonperforming loans is likely to keep credit …
12th August 2014
The past few months have brought further evidence that credit growth is coming off the boil in parts of the Gulf. As we explain in this Watch, there are reasons to think that this could prove to be more than temporary in Saudi Arabia. In contrast, credit …
7th August 2014
The fall in Egypt’s PMI in July was disappointing in light of the recent improvement in the hard activity data. However, the bigger picture is that the economy is stronger than it was a year ago. Elsewhere, the PMIs point to robust activity in non-oil …
5th August 2014
Three years on from the “Arab Spring” uprisings, the tide is turning in favour of the economies of North Africa. Admittedly, there are still many challenges, not least reining in large twin current account and fiscal deficits. Nonetheless, a gradual …
31st July 2014
Following a difficult few years, the latest data have provided further evidence that things are improving in North Africa. It looks like growth in both Tunisia and Egypt accelerated over the first half of this year. Admittedly, growth in Morocco – …
29th July 2014
Equity markets across the MENA region have rebounded following a poor performance in June. The Dubai stock market has recouped a large chunk of its previous losses. And equities in Saudi Arabia have been buoyed by the possibility that foreigners will soon …
24th July 2014
Having struggled over the past few years, the Egyptian economy has rebounded at the start of 2014 and a number of indicators suggest that growth in Q2 may have been the fastest since early 2012. Barring a fresh political crisis, we expect growth to …
23rd July 2014
The Saudi authorities’ plan to open up the stock market to foreign investors is clearly a step in the right direction. But with equity valuations already stretched, we doubt that it will be the trigger for a marked rally over the medium term. What’s more, …
22nd July 2014
The Egyptian central bank’s surprise decision to hike interest rates today appears to have been in anticipation of a sharp rise in inflation over the coming months. This follows the government’s recent move to raise energy prices. However, economic growth …
17th July 2014
Tunisia’s economy has faced a difficult few years since the country’s revolution in 2011. But assuming that upcoming elections pass smoothly, a return to some form of political stability should lay the foundations for a pick-up in growth over the next …
14th July 2014
Our GDP Tracker suggests that the Saudi economy weakened a touch in May as the boost from the oil sector earlier in the year started to fade while the non-oil sector remained sluggish by past standards. … Growth in Saudi Arabia eases as boost from oil …
10th July 2014
The Qatari authorities have recently painted a pretty upbeat picture of the economy’s prospects. As we explain in this Watch, while the government is probably right in expecting to see relatively strong growth rates over the next couple of years, there …
9th July 2014
The package of energy subsidy cuts unveiled by the Egyptian government over the weekend is a positive first step towards tackling the country’s gaping budget deficit. Further reforms will be needed to put the public finances onto a more sustainable …
7th July 2014
Q1 GDP data showed that the Saudi economy slowed a touch from Q4 on the back of weakness in the non-oil private sector. The latest PMI surveys suggest that growth in this sector stabilised in Q2, although it’s difficult to square this with other …
3rd July 2014
Q1 GDP data published earlier today showed that Egypt’s economy has continued its gradual recovery from last summer’s “second revolution”. And there were some encouraging signs that easing political tensions have led to a pick-up in investment spending. …
30th June 2014
