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With Egypt’s presidential election now out of the way, policymakers’ attention has turned to reviving the struggling economy. In this Focus , we outline five areas which we think need to be addressed if Egypt is to enjoy a period of strong and sustained …
26th June 2014
The Dubai equity market has fallen sharply over the past month amid concerns that the Emirate’s real estate sector is becoming another bubble. Elsewhere, spreads on Egypt’s dollar-denominated bonds hit post-“Arab Spring” lows earlier this month amid …
24th June 2014
The unfolding crisis in Iraq has cast a shadow over the region, causing equity markets to tumble. As it happens, the largest MENA economies have only limited trade and financial ties with Iraq, meaning that, in aggregate at least, the economic spillovers …
19th June 2014
Bahrain’s economy grew at its fastest pace last year since 2008, but this was driven by a rebound in the oil sector which is unlikely to last. On top of this, political tensions remain high and fiscal policy is likely to become less supportive of growth. …
18th June 2014
There are growing hopes that the gradual recovery in the Egyptian economy will help to bring the dire public finances on to a more sustainable path. But while we think this will have some impact, in the absence of tighter fiscal policy, the budget …
16th June 2014
The unfolding crisis in Iraq, including the capture of key cities by insurgents, will heighten fears that the country is sliding into civil war. While we suspect that the economic impact of the crisis on the rest of the region will be limited, it will …
12th June 2014
Our GDP Tracker suggests that the Saudi economy started the second quarter on a weaker note as growth in the oil sector slowed and activity in the non-oil economy remained sluggish by past standards. … Saudi economy appears to have weakened at the start …
9th June 2014
In its latest Article IV for Saudi, the IMF painted an upbeat picture of the economy. However, as we outline in this Watch , there are good reasons to think that growth may slow over the coming years. … Why we’re relatively downbeat on the Saudi …
5th June 2014
Having embarked on subsidy cuts last year, the Moroccan authorities have made good progress on tackling the country’s weak public finances. There is still work to do if the government is to meet its longer-term targets for the budget deficit. But the key …
4th June 2014
May’s ‘whole economy’ PMI data show that, although the Egyptian economy is faring better than it was last summer, growth is sluggish. And looking ahead, in spite of the optimism following Abdel Fattah al-Sisi’s victory in last week’s presidential …
3rd June 2014
Although the Egyptian central bank left interest rates on hold today, there is growing speculation that, following Abdel Fattah al-Sisi’s decisive victory in the recent presidential election, rate cuts could come back onto the agenda. For our part, we’re …
29th May 2014
Dubai’s equity market tumbled earlier in the month following the upgrade by MSCI from “frontier” to “emerging” market status. Stocks in Abu Dhabi and Qatar (which were also upgraded) fell too, but to a lesser extent. Elsewhere, Egypt’s financial markets …
28th May 2014
Egypt’s upcoming presidential election has cast the spotlight back onto the country’s bumpy transition to democracy. Abdel Fattah al-Sisi, who led last summer’s “second revolution”, is widely expected to sweep to victory, and there are growing hopes that …
22nd May 2014
It looks like economic growth accelerated further in Saudi Arabia, the UAE and Qatar over the first few months of the year. In Saudi Arabia, this was supported by a rebound in the oil sector, while non-oil sectors in the UAE and Qatar have picked up. By …
21st May 2014
The fall in the Egyptian pound in recent weeks is significant given that the central bank had maintained a tight grip on the currency over the past year. No official explanation has been provided for the apparent policy shift. But we suspect that …
20th May 2014
The latest data suggest that Saudi household spending is still relatively sluggish and, with fiscal policy set to become less supportive over the coming years, we’re not anticipating a marked improvement soon. … Little sign of a turnaround in Saudi …
15th May 2014
Egypt has one of the worst fiscal positions in the world, but the risk of default is lower than some seem to think. Funding from the Gulf, coupled with a domestic banking sector willing to purchase and hold public debt, means the authorities shouldn’t …
14th May 2014
Our GDP Tracker suggests that the Saudi Arabian economy grew at a robust rate of over 5% y/y in Q1. However, growth looks set to slow over the next twelve to eighteen months as the rebound in the oil sector tails off and activity in the non-oil economy …
12th May 2014
Abdel Fatah al-Sisi, the leader of last summer’s “second revolution”, looks set to sweep to victory in Egypt’s presidential election, scheduled for 26th - 27th May. In this Watch , we take a closer look at what changes in economic policymaking might occur …
8th May 2014
April’s PMI data from the MENA region suggests that the rebound in the UAE’s economy has strengthened. Meanwhile, the economic recovery in Egypt from last summer’s unrest remains bumpy as the country gears up for presidential elections later this month. …
6th May 2014
A drop in food inflation has caused inflationary pressures to ease across much of the Gulf over the past twelve months. But inflation may now be bottoming out. Food inflation is set to pick-up again in the coming months while in some countries there are …
1st May 2014
Equity markets in the UAE and Qatar have rallied in the past month ahead of their upgrade to emerging market status by MSCI. By contrast, the Egyptian stock market has had a relatively disappointing time as the country gears up for May’s presidential …
29th April 2014
The Central Bank of Egypt kept interest rates on hold today and, with the outlook for inflation deteriorating, they are likely to remain unchanged for the next six to twelve months. … Central Bank of Egypt holds rates as inflation outlook …
28th April 2014
Inflation has followed very different paths in the Gulf’s two largest economies, Saudi Arabia and the United Arab Emirates, in recent months. In Saudi, consumer price inflation has continued to fall, with the headline rate coming in at 2.6% y/y in March, …
24th April 2014
After a torrid few years, the outlook for the North African economies is brightening. Political tensions are easing and the provision of external financial support has shored up balance of payments positions. Admittedly, elections in Egypt and Tunisia …
23rd April 2014
The Saudi Arabian economy picked up in Q4 of last year on the back of the continued rebound in the oil sector. Growth may have accelerated further in Q1, but it is likely to remain below the rates of 6% or so recorded in the previous decade. … Saudi Q4 …
22nd April 2014
Three years on from the Arab Spring uprisings, political uncertainty continues to weigh on the near-term outlook for Egypt, Morocco and Tunisia. But over a longer horizon, assuming that policymakers can push through reforms, these countries could …
15th April 2014
Our GDP Tracker suggests that growth in the Saudi economy accelerated to around 5% y/y in the first few months of this year. The pick-up in growth has been driven by the oil sector. However, there are signs that domestic demand is weakening. … Saudi …
14th April 2014
Egyptian inflation has fallen back in recent months as the effects of last year’s sharp depreciation of the pound have started to unwind. But with the economy starting to recover and the outlook for inflation deteriorating, the case for further interest …
10th April 2014
There appears to be a growing consensus that improvements in the Saudi Arabian labour market mean that the country can sustain rapid consumer credit growth. While we think there is some justification to this argument, we find it far from convincing. … …
9th April 2014
Algerians are set to take to the polls later this month as they vote for their next president. In theory, this could be an opportunity to kick-start much-needed economic reform. But, as we explain in this Watch , there is little prospect of this …
3rd April 2014
March’s PMIs from the MENA region, released earlier today, show that the UAE’s non-oil economy continues to strengthen, but domestic demand in Saudi Arabia may have weakened in recent months. Meanwhile, Egypt’s economy is still on a bumpy path. … PMIs …
Recently released GDP data showed that growth in the North African economies (Egypt, Morocco and Tunisia) picked up modestly in the final quarter of last year. We expect growth to strengthen further this year, with Egypt benefitting from Gulf-funded …
31st March 2014
Equity markets in the MENA region continue to soar. Dubai’s market has been the region’s best performer since the start of the year, closely followed by that of Egypt, which has been buoyed by optimism surrounding the prospects for political stability in …
27th March 2014
Five years on from Dubai’s debt crisis, the UAE’s banking sector appears to be returning to health, which should open the way for an improvement in credit growth. However, the large overhang of debt from the pre-crisis boom years means banks are likely to …
An influx of financing from the Gulf since last summer has eased strains in Egypt’s balance of payments and brought the country back from the brink of a crisis. Nonetheless, this situation isn’t sustainable over a longer horizon. Eventually, the Egyptian …
24th March 2014
Growth in the MENA region’s major economies appears to have accelerated in recent months. Our GDP tracker points towards a pick-up in growth in the Saudi economy at the start of the year, and timely indicators suggest that the Egyptian and Moroccan …
20th March 2014
A combination of stagnant production and rapidly increasing domestic consumption means that Egypt is set to become a net importer of natural gas in the near future. Support from the Gulf should help to mitigate the impact of lower gas export revenues in …
18th March 2014
The agreement between Dubai, Abu Dhabi and the Central Bank of the UAE to rollover $20bn of Dubai’s government debt marks another important step in the Emirate’s recovery from its 2009-10 crisis. However, the bigger concern lies with debt owed by Dubai’s …
17th March 2014
Egyptian presidential elections are due to be held in the coming months with Field Marshal al-Sisi, the leader of July’s “second revolution”, widely tipped to emerge triumphant. However, he would inherit an economy that is still reeling from three years …
12th March 2014
Our GDP Tracker suggests that growth in the Saudi Arabian economy picked up at the start of this year. But the rebound has been driven by the oil sector, while the non-oil sector continues to struggle. … Pick-up in Saudi economy driven by the oil …
10th March 2014
The rapid rise in Omani government spending in recent years has caused the budget surplus to narrow sharply and, if we’re right in expecting oil prices to fall over the coming years, the budget position could even swing into deficit. The country’s …
6th March 2014
The latest PMI data from the MENA region suggest that growth in non-oil sectors in the Gulf remains relatively robust, bolstered by strengthening external demand. The Egyptian economy is much weaker, although it has picked up since the second half of last …
4th March 2014
The Egyptian central bank’s decision to leave interest rates on hold for the second meeting in a row might suggest that the easing cycle of the past half a year has come to an end. However, given that the economy remains extremely weak, coupled with our …
27th February 2014
Morocco’s exports have, so far, seen little benefit from the recovery in the country’s key trading partners in the euro-zone. But the headline trade figures mask some encouraging developments. In particular, Morocco’s nascent car industry is booming and, …
Equity markets in the MENA region have continued to perform strongly over the past month. Dubai remains the star performer, while recent political developments have buoyed stock markets in Egypt and Tunisia. … MENA equities continue to …
25th February 2014
Qatar is unlikely to return to the double-digit growth rates seen over the past decade, but the government’s ambitious investment programme means that GDP should still expand by a healthy 5% or so over the coming years. This would make it the region’s …
20th February 2014
In spite of their strong trade and financial ties to the euro-zone, Morocco and Tunisia have, so far at least, seen little benefit from the recovery there. Admittedly, inflows of foreign direct investment have risen slightly. However, goods exports are …
19th February 2014
The Egyptian economy has shown signs of recovering in recent months but this has yet to feed through to the labour market. Crucially, GDP growth is still below the rates of around 4-5% that are needed to bring the unemployment rate down. What’s more, high …
18th February 2014
Some of the largest falls in emerging market currencies in recent weeks have come in countries where exchange rates are tightly managed and foreign exchange reserves are low. On this basis, the MENA region’s non-oil producers appear to be vulnerable. …
13th February 2014
