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The much-anticipated announcement of the new Egyptian cabinet was a bit of a damp squib. Admittedly, the technocratic nature of the new administration has calmed fears of an Islamist-dominated government. But since many of the ministers were part of the …
2nd August 2012
Global agricultural prices have risen by around 17% in July, raising fresh fears that food inflation will increase in the oil-rich Gulf. But given subdued core price pressures in most of these countries and the strength of the US dollar, overall …
31st July 2012
The decision by Egypt’s Central Bank (CBE) to keep interest rates on hold was unsurprising. Although the economy is weak and inflationary pressures subdued, political instability will keep pressure on the balance of payments. … Egypt’s rates on hold as …
26th July 2012
The increase in oil prices over the past few weeks has been partly blamed on the escalation in tensions in Syria, which has raised fresh concerns of supply disruptions. But unless the Syrian crisis develops into a full-scale regional conflict, we think …
The surprising appointment of Dr. Hisham Kandil as Egypt’s new Prime Minister is unlikely to calm nerves in the financial markets. For a start, he lacks the economic credentials that some were hoping for. At the same time, his appointment may hint at …
24th July 2012
Inflation pressures are easing in most countries in the Middle East and North Africa region. The drop in global commodity prices has led to a fall in food price inflation across the region. Meanwhile, weak domestic demand in the resource-poor countries …
19th July 2012
Today’s announcement that the UAE has approved plans for its first nuclear power plant should help to reduce fears that even more oil will have to be used for domestic consumption rather than exported. Admittedly, the UAE accounts for less than 4% of …
18th July 2012
Saudi Arabia’s headline inflation fell in June on the back of easing core price pressures and a modest drop in food inflation. … Saudi Arabia Consumer Prices …
11th July 2012
The election of Dr. Mohamed Mursi as Egypt’s first democratically-elected president last month represented a significant step in the country’s transition. But as we expected, tensions between the new president and the military have quickly surfaced, …
Egyptian inflation fell to a nine-month low in June on the back of weaker food inflation. Nonetheless, this is unlikely to pave the way for looser monetary policy – at least until the political situation stabilises and an IMF deal is in place. … Egypt …
10th July 2012
Provisional data from the Central Bank of Egypt (CBE) showing no improvement in foreign currency reserves in June – as had been hoped – will keep pressure on the pound. With political conditions still fragile, we think that reaching a deal with the IMF is …
9th July 2012
Kuwait’s political crisis is showing no signs of abating as former Prime Minister Sheikh Jabir bin Mubarak Al-Sabah has been reappointed only four days after he resigned. For now, tensions between the opposition-led parliament and the government are set …
5th July 2012
June’s PMI data show that Saudi Arabia’s non-oil private sector continued to grow robustly, bucking the trend in other parts of the world. Nonetheless, the data also suggest that a repeat of last year’s record performance is looking increasingly unlikely. …
3rd July 2012
The UAE’s PMI fell slightly in June but the headline index still point towards a modest improvement in private sector activity between Q1 and Q2. … UAE HSBC/Markit PMI …
Investor concerns over the risk of a disorderly devaluation of the pound are beginning to fade on the back of fresh hopes that the new Egyptian president will pursue an agreement with the IMF. However, given that political conditions remain fragile, the …
2nd July 2012
We maintain our view that the imminent tightening of Western sanctions on Iran is unlikely to have anywhere near as large an impact on global oil prices as many had feared. Demand is weakening and other suppliers are both able and willing to meet any …
29th June 2012
The economic prospects for some of the resource-poor Arab countries are brighter than their current conditions suggest. Although political transitions are proving difficult, we still think that they could ultimately usher in a new era of rapid growth in …
28th June 2012
Egypt made a significant step in its transition yesterday following the announcement that the Muslim Brotherhood’s Mohamed Mursi has won the presidential election run-off. Even so, we remain cautious in the very near term, since recent moves to increase …
25th June 2012
Fears for the health of the global economy have sent Brent crude prices down by more than $30 per barrel in the past month, raising fresh concerns over the sustainability of the recent fiscal packages across the oil-rich Gulf. In contrast, the …
22nd June 2012
The Egyptian military is tightening its grip over political life in the country, casting doubts over the authority of the new president. Investors should therefore be concerned that recent developments will probably increase the risk of further social …
18th June 2012
The decision by Egypt’s Central Bank (CBE) to keep interest rates on hold was understandably overshadowed by rising tensions following today’s recommendation by the constitutional court that parliament should be disbanded. As political conditions worsen, …
14th June 2012
The escalation in the euro-zone crisis and recent falls in the oil price have weighed heavily on the Arab region’s equity markets over the past month. Indeed, even if Dubai and Qatar are upgraded to the MSCI Emerging Markets index on 20th June, any …
One of the main channels through which the euro-zone debt crisis could affect the oil-rich Gulf economies is via a drop in foreign capital inflows due to heightened global risk aversion. In particular, lending from euro-zone banks could fall. In this we …
13th June 2012
The fall in Egyptian inflation to a seven-month low in May is good news but does not provide sufficient grounds for the central bank to cut its benchmark interest rate on Thursday. … Egypt inflation down, but little chance of rate …
11th June 2012
The combination of a deep recession in the euro-zone and the Arab world’s own political turmoil will act as a drag on the region’s economies in the near term. The North African countries are likely to be hurt most given their heavy exposure to Europe and …
7th June 2012
The primary channels through which a recession in the euro-zone will impact the Arab region are a deterioration in world trade, lower remittances, a drop in capital flows and falls in commodity prices. Although no part of the region is immune, North …
The slowdown in Saudi Arabia’s annual GDP growth rate from a 6.6% y/y in Q4 2011 to 5.9% y/y in Q1 2012 suggests that last year’s record performance in the non-oil sector is unsustainable. … Saudi Arabia’s economy disappoints in …
6th June 2012
Our new Saudi Arabian whole-economy activity proxy suggests that GDP grew by around 7% y/y in the first quarter of this year, maintaining the record pace of growth in 2011. However, the combination of weaker government spending growth, the deteriorating …
29th May 2012
Early results from the first round of Egypt’s presidential election appear to have polarised society, pitting Islamists against secularists, and revolutionaries against the old guard. The outcome remains highly uncertain, but the key point is that while …
28th May 2012
The results of the 1st round of presidential elections in Egypt could prolong the political uncertainty that has gripped the country since the revolution, which will increase the near-term risk of a currency crisis. … Egypt: political uncertainty set …
The pick-up in Tunisia’s annual GDP growth rate from a of 0.4% y/y in Q4 2011 to an impressive of 4.8% y/y in Q1 2012 is flattered by base effects stemming from the collapse in output this time last year. With these effects set to begin to fade, and …
25th May 2012
Today marks the first day in Egypt’s presidential elections with the opinion polls and expatriate votes showing contradictory results. Regardless of who wins, two outstanding issues remain from an economic perspective. First the new constitution defining …
23rd May 2012
The soaring cost of energy subsidies has led the Jordanian government to turn to the IMF and Saudi Arabia for $5 billion in external financial assistance. We think that given Jordan’s geopolitical importance, foreign funding will be forthcoming which will …
The pick-up in Egypt’s GDP growth from 0.4% y/y in Q4 to 5.2% y/y in Q1 was flattered by favourable base effects. Indeed, on a seasonally adjusted basis, we estimate that output contracted by 1.4% q/q during the first quarter. … Egypt’s economy …
21st May 2012
Monthly activity data suggest that the Egyptian economy may have grown by up to 10% y/y in Q1. But this will have been helped by favourable base effects, given the almost 5% y/y contraction in output in Q1 of last year. As these effects unwind over the …
17th May 2012
Recent comments from Egypt’s Finance Minister suggest that the country could receive help from the IMF next month. But with the external environment deteriorating sharply over the past few weeks, there is a real risk that any slippage to this timetable …
16th May 2012
A huge fiscal stimulus by the Saudi government ensured that the country avoided the unrest that swept the region last year and drove growth rates in the non-oil economy to record highs. However, the most recent run of data points towards a build up in …
15th May 2012
Egypt’s headline inflation dropped in April on the back of a fall in housing and utilities inflation. Meanwhile, food inflation remained unchanged. … Egypt Consumer Prices …
10th May 2012
Fresh hopes that some equity markets in the Middle East and North Africa (MENA) had turned a corner at the start of 2012 have quickly faded. Instead, attention has turned to Islamic bond markets, which are set for another record year. … Middle East …
9th May 2012
The increase in Egypt’s foreign currency reserves in April is good news but it is unlikely to last. The fact is that last month’s rise is very small. What’s more, it is largely due to a one-off payment from Iraq and seasonal factors boosting tourism …
8th May 2012
One of the most striking – and often overlooked – developments in the Middle East and North Africa (MENA) following the Arab Spring has been the stark divergence in the fiscal health of the region’s resource-rich and resource-poor countries. While …
4th May 2012
The pick-up in the UAE’s PMI index in April provides grounds for cautious optimism, not least since it appears that the economy may be benefitting from strong growth elsewhere in the Gulf. Nonetheless, the risks to the economy are still skewed to the …
3rd May 2012
Today marks the beginning of campaigning for Egypt’s presidential elections. While most commentators are focusing on the likely winner, we think that the definition of the exact powers of Egypt’s next president is perhaps more important. After all, the …
30th April 2012
The high level of interest in this week’s Sukuk issuance by Dubai is a sign of renewed confidence in the emirate’s debt. However, since no funds will be allocated to Dubai’s government-related entities (GREs), some could still face refinancing …
27th April 2012
The decision by the Egyptian parliament to reject the government’s economic plan highlights a growing rift between the Muslim Brotherhood and the military-appointed administration. Worryingly, this means that a deal with the IMF over a $3.2 billion loan …
25th April 2012
The recent announcement by the G7’s Deauville Partnership that it will soon deliver on its earlier promise of a $20 billion ‘Arab Spring’ package to Egypt, Morocco, Tunisia, Libya and Jordan, could not have come at a better time. Given the turmoil in …
24th April 2012
Ample liquidity coupled with a decreasing reliance on foreign funding mean that most banks in the Gulf are well-placed to weather any storm in the euro-zone’s financial system. But deleveraging in Europe will reduce direct credit lines to the Gulf’s …
19th April 2012
By most measures, Saudi stocks appear to be undervalued by up to 30%. Recent earnings data have also beaten analysts’ estimates and expectations for profit growth are strong leading many to suggest that the TADAWUL index could soon exceed the 10,000 mark, …
18th April 2012
Various events over the past couple of days have thrown Egypt’s fragile political transition into disarray. These developments raise fresh doubts over the country’s ability to secure external financial assistance and in turn increase the risk of a …
16th April 2012
Consistent with trends in other emerging markets, most of the Middle East’s stock markets have dropped back from the highs reached earlier this year. While Egypt’s fall is perhaps the most striking, the region’s other strong performers, namely Dubai and …
12th April 2012
