Filtered by Subscriptions: Middle East & North Africa Economics Use setting Middle East & North Africa Economics
April’s PMI data paint a familiar picture of continued economic weakness in Egypt and continued rapid growth in the Gulf. … PMIs suggest growth divisions …
7th May 2013
We expect oil production in the Gulf to remain lower this year than in 2012, which will be a drag on annual GDP growth. But even so, we don’t think it will lead to a collapse in overall economic activity or challenge the Gulf’s fiscal sustainability. … …
2nd May 2013
Egyptian banks have been remarkably stable throughout the political upheaval of the past few years. If we’re right in thinking that Egypt’s economy will continue to muddle through without falling into a balance of payments crisis, then the banking sector …
30th April 2013
Stock markets across the MENA region have outperformed other emerging markets since the start of the year. By far the strongest performers have been equity markets in the UAE. … UAE equities continue to …
29th April 2013
Political deadlock in Egypt has placed another obstacle in the way of negotiations with the IMF. A team from the Fund left Cairo earlier this month without an agreement in place, apparently as a result of the lack of political consensus for reforms. With …
25th April 2013
Tunisia’s IMF deal is a crucial step to helping the economy out of its post-revolution slump. But the agreement also underlines the need for political consensus in the Arab Spring countries in order for tough economic decisions to be made. For this reason …
22nd April 2013
The recent fall in oil prices is unlikely to unduly trouble the Gulf States. Prices need to drop much further and stay there before they run fiscal deficits, and even then large savings and low debt levels mean that governments shouldn’t have to tighten …
18th April 2013
Concerns that Saudi Arabia’s dollar peg is no longer suitable in light of the country’s growing trade ties with Asia look wide of the mark. There are a myriad of other tools that Saudi policymakers can (and do) use to either support the economy or to …
17th April 2013
The Gulf economies are on course to grow at a decent pace this year, but the boost to their resource-poor neighbours is likely to be limited. Trade and investment links are surprisingly small. Instead, the one channel through which the resource-poor …
15th April 2013
The Saudi economy slowed sharply in Q4, but the breakdown of the GDP data shows that the non-oil private sector remains robust. Looking ahead, fiscal stimulus and rapid credit growth should support the non-oil sector and we expect the economy to expand at …
11th April 2013
Egyptian inflation edged down in March, but it has still risen sharply since the end of last year and we think it will reach double digits over the coming months. The irony is that the recent spike in inflation has been caused in part by the imposition of …
10th April 2013
The Gulf economies are on course to outperform the rest of the region over the next year or so. Admittedly, weak oil production will act as a drag on growth in 2013. But increased government spending should help to offset this. We have pencilled in growth …
4th April 2013
March’s PMI data suggest that the Gulf economies’ private sectors continue to grow at a robust pace. Meanwhile, there are signs that the downturn in Egypt has deepened as FX restrictions weigh on activity. … Gulf economies …
3rd April 2013
Continued delays to Egypt’s prospective IMF deal have raised the possibility of a default on its FX debt. A team from the Fund is due in Cairo tomorrow to discuss a financing package, but even if a deal isn’t agreed in the very near-term, further …
2nd April 2013
Yields on Egyptian dollar-denominated bonds have spiked as an IMF deal looks increasingly distant and concerns over the government’s fiscal position mount. … Bond yields spike in Egypt as IMF deal looks further …
27th March 2013
The deterioration in the French, Italian and Spanish economies in recent months has caused the growth outlook for North Africa to worsen. Coming on top of continued domestic political instability, growth looks set to disappoint again this year – we expect …
25th March 2013
The Egyptian central bank’s move to raise interest rates in spite of the weak economy shows that policymakers have run out of options. Capital controls and FX intervention haven’t been sufficient to ease strains in the balance of payments. And with an IMF …
21st March 2013
Food inflation in the resource-poor Arab countries should peak in the coming months, albeit at high rates, before falling back in early 2014. But in the near-term, the risk that high inflation translates into fresh civil unrest could make policymakers …
20th March 2013
Saudi Arabia’s growing trade ties with Asia bode well for the economy’s growth prospects over the coming years. While we expect advanced economies to remain sluggish, Emerging Asia should grow at around 6% per year. However, resilient oil exports mean …
18th March 2013
A combination of rising government spending, rapid and accelerating credit growth, and a rise in headline inflation has led some commentators to warn that the Saudi economy is overheating. Looking ahead, we think this is certainly a risk. However, for now …
14th March 2013
Continued political turmoil and the ongoing recession in the euro-zone will weigh on growth in Tunisia this year. Over the longer-term, however, if the political situation calms down and structural reforms are implemented, we believe the economy has the …
12th March 2013
The IMF’s reservations over Egypt’s economic programme have dealt a blow to hopes that a financing package will be agreed in the short-term. This doesn’t necessarily mean that Egypt is now destined for a balance of payments crisis. But it does underline …
11th March 2013
The Egyptian pound has stabilised since the beginning of February. But this doesn’t reflect an improvement in Egypt’s economic fundamentals. Rather it is the result of tighter capital controls. … Egypt: the pound's stabilisation comes at a …
7th March 2013
February’s PMIs suggest that the Egyptian economy remains in the doldrums against a backdrop of continued civil unrest. By contrast, the Gulf economies appear on course to grow at a healthy pace. … Egypt's economy still in the …
5th March 2013
The French economy is set to fall further behind others in the euro-zone as labour market rigidity holds back competitiveness and household spending is hit by fiscal austerity. This might cause France to push harder for more supportive policies for the …
4th March 2013
Political unrest is increasing balance of payments strains across the region’s resource-poor economies. Egypt has grabbed the headlines, but there are also external financing concerns in Jordan and Tunisia. … External fragilities remain high in the …
27th February 2013
Equities in the UAE have rallied over the past few months on hopes that the economic recovery is gathering pace. Elsewhere in the region, the Egyptian pound has stabilised recently following the CBE’s introduction of tighter capital controls, but this is …
26th February 2013
The Gulf economies cut back oil production towards the end of last year against the backdrop of the weakening global economy. But while the hydrocarbon sector may be a drag on growth in 2013, it looks like this is being offset by the strength of domestic …
21st February 2013
Morocco is set to be the best performer among the resource-poor Arab economies this year, supported by a comparatively stable political and macroeconomic environment and a rebound in the agricultural sector. That said, the recession in the euro-zone and …
20th February 2013
Recently announced plans in the Gulf countries to ease fiscal policy to counter the global downturn could lead to renewed fears of overheating in the region. Our core inflation measures suggest that there is little to worry about for now. Indeed, core …
18th February 2013
The depreciation of the Egyptian pound has slowed in recent weeks, but only because of a tightening of capital controls. If these remain in place for any length of time, they could present another headwind to the growth outlook. … Egypt's capital …
14th February 2013
All eyes have focused on the fall of the Egyptian pound since the end of last year. But at the same time, the economy has taken a sharp turn for the worse. This suggests that job creation probably slowed and the squeeze on households’ incomes intensified. …
13th February 2013
Continued unrest has led to a worsening of Egypt’s fiscal position over the past year or so and we estimate that fiscal tightening of 3% of GDP is needed just to stabilise the debt ratio. However, measures to put the public finances onto a more …
11th February 2013
The high cost of oil reflects hopes of a strong recovery in demand at least as much as tensions in the Middle East. However, the price of a barrel of Brent probably still includes a premium of $10-15 for the possibility of more significant disruption to …
7th February 2013
The fall in Egypt’s FX reserves last month underlines the limited firepower that the authorities have to stem depreciation pressures on the pound. We think the pound could fall a further 10% or so over the coming months to 7.50/US$. … Egypt's FX …
5th February 2013
January’s PMI data suggest that civil unrest and political uncertainty continue to weigh heavily on activity in Egypt. By contrast, the Gulf economies are growing at a robust pace. … Egypt's economy continues to suffer amid civil …
Growing strains in the balance of payments continue to prevent any loosening of monetary policy to support Egypt’s struggling economy. We don’t think there will be any scope to ease policy until the authorities secure an IMF deal and political tensions …
31st January 2013
The Egyptian pound has fallen sharply over the past month after the Central Bank of Egypt loosened its grip on the currency. We think the pound could fall by a further 10-15% to around 7.5/US$, although much hinges on the progress of talks with the IMF. …
29th January 2013
Although Egypt’s constitutional crisis has eased, the currency is now presenting a fresh cause for concern. Our central view remains that Egypt will secure an IMF deal which, combined with a return of private capital inflows and official aid, should …
24th January 2013
Our Saudi Activity Proxy shows that the economy picked up modestly towards the end of last year. And looking ahead, government stimulus should keep the economy growing at a healthy clip. … Saudi stimulus to keep economy …
22nd January 2013
Two years have passed since the start of the ‘Arab Spring’ and the economic progress that many hoped for at the time still hasn’t materialised. But while the transition process is likely to remain bumpy in the short-term, over the longer-term we think …
21st January 2013
With all eyes on Egypt’s currency crisis, it’s easy to forget the fiscal crisis hitting the resource-poor Arab countries at the same time. Gaping budget deficits are squeezing out investment and damaging the region’s productive capacity. Fiscal …
16th January 2013
Fears that the recent fall in the Egyptian pound will lead to a sharp rise in inflation are overplayed. Instead, tax hikes and subsidy cuts are likely to have a much greater impact on headline inflation over the coming year. … Egyptian inflation to rise …
15th January 2013
The rise in government spending announced in the Saudi budget for this year reinforces our view that supportive fiscal policy should enable the economy to continue to perform well despite a weak global environment. But at the same time, strong near-term …
14th January 2013
The latest PMI data suggest that Egypt’s constitutional crisis took a heavy toll on the economy at the end of last year. By contrast, activity in the Gulf economies is holding up well, buoyed by fiscal stimulus. … Constitutional crisis weighs on …
9th January 2013
With the Central Bank of Egypt (CBE) loosening its grip on the pound, the key question is whether the authorities will succeed in overseeing an “orderly” devaluation of the currency. If an IMF deal can be secured we think they stand a good chance, …
8th January 2013
The Egyptian central bank appears to have shifted from keeping the pound pegged to the dollar to allowing a relatively gradual devaluation. We think this process has further to run and the pound could fall by a further 10-15% vs. the dollar over the …
2nd January 2013
Egypt’s constitutional crisis continues to cast a dark shadow over the economy. Admittedly, the vote on the new draft constitution passed off more smoothly than might have been expected. But the political situation has become much more polarised and …
19th December 2012
The Middle East remains a region of two halves. On the one hand, the Gulf economies are in good shape and look well placed to weather what is likely to be a challenging year ahead for the world economy. We expect the GCC economies to grow by over 3% next …
17th December 2012
The pick-up in Saudi Arabia’s GDP growth in Q3 supports our view that it is on track to be one of the best performers in the MENA region next year. However, the breakdown shows that growth was driven largely by a sharp rise in government spending. … …
11th December 2012
