Filtered by Subscriptions: Middle East & North Africa Economics Use setting Middle East & North Africa Economics
Successful elections in Tunisia and Morocco, and initially in Egypt, have been overshadowed by a marked deterioration in economic conditions in North Africa. Indeed, Egypt is at a growing risk of a full-blown of balance of payments crisis. In contrast, …
20th December 2011
Today’s reports that Egypt’s GDP grew by 0.5% y/y in the third quarter suggest that the economy has now recovered most of the initial losses in output brought about by the social unrest. However, given the poor state of public finances and the threat of a …
15th December 2011
Yesterday’s ministerial reshuffle in Saudi Arabia reflects the fact that previous administrations have fallen well short of the targets for growth and employment set out in the recent National Development Plan. But even if these moves help to speed up the …
14th December 2011
This year’s fiscal stimulus packages in the Gulf Cooperation Council (GCC) countries have increased the risk of a spending squeeze in the next 10 to 20 years. Admittedly, enormous foreign currency reserves, low public debt levels and consistent fiscal …
Despite growing concerns, we think that Dubai’s government-related entities (GREs) should be able to service the $3.8 billion in bonds that mature next year. Instead, the more pressing issue is the on-going restructuring of loans by banks, and delayed …
12th December 2011
The ruling Supreme Council of the Armed Forces’ (SCAF) dithering over securing external financial assistance has left Egypt teetering on the edge of a full-blown economic crisis. The central bank’s reserves are dangerously low and, without outside help, …
7th December 2011
We broadly agree with the consensus view that most emerging economies will hold up well in 2012. But with the US set to slow and the euro-zone heading towards break-up, the path ahead is going to be bumpy. Here are five developments that emerging market …
November’s PMI data show that, after slowing in the third quarter, growth in Saudi Arabia’s non-oil private sector is gathering momentum again. However, higher purchase and staff costs mean that price pressures have increased. … Saudi Arabia HSBC/Markit …
5th December 2011
The sharp fall in the PMI’s export component shows the vulnerability of UAE’s non-oil economy to global conditions. … UAE HSBC/Markit PMI …
Although the official results from Egypt’s first round of elections have not yet been released, it is almost certain that the Freedom and Justice party (the political arm of the Muslim Brotherhood) has won at least 40% of the vote. If this is confirmed, …
1st December 2011
Following similar moves in other Gulf countries, the UAE announced an increase of up to 100% in the pay of some public sector workers, as well as the introduction of a $2.7 billion fund to help low-income households with loan repayments. But while the …
30th November 2011
On the face of it, the resignation of the Kuwaiti government adds to the general sense that political risks in the Arab world are escalating once again. However, given that Kuwait is much wealthier than the likes of Egypt and Tunisia, and that its …
28th November 2011
Today’s rate hike by 100 bps to 9.25% is a clear sign that Egypt’s central bank is increasingly concerned over growing balance of payments strains and the risk of a currency crisis. Although the economy is still weak, and core inflation has fallen to …
24th November 2011
The past month has been dominated by events in Egypt. Renewed clashes between protestors and the security forces, coupled with the resignation of the interim government, have left parliamentary elections planned for later this month in serious doubt. For …
22nd November 2011
21st November 2011
Inflation in Saudi Arabia edged down slightly last month as a sharp drop in food inflation offset a rise in domestic goods and services inflation. … Saudi Arabia Consumer Prices …
The UAE’s banks are better prepared to face the fallout of the euro-zone debt crisis than they were during the financial crisis of 2008. However, lending to the private sector is unlikely to return to healthy levels until 2013 at the earliest. …
17th November 2011
The decision by privately-owned banks in Egypt to raise deposit rates by around two percentage points may slow the rate of dollarization of resident accounts, which could help the central bank in its efforts to stabilise the pound. Nonetheless, any …
15th November 2011
The Arab League’s decision to suspend Syria’s membership paves the way for harsher economic and political sanctions that should weaken President Bashar Al-Assad’s leadership. Admittedly, Iraq, Yemen and Lebanon, which combined account for over 40% of …
14th November 2011
Although Egyptian inflation fell to its slowest rate for 4 years in October, currency concerns continue to prevent a near-term cut in interest rates. Indeed, if there is any rate change before the end of the year, it is more likely to be up than down. …
10th November 2011
We estimate that the Central Bank of Egypt has sufficient FX reserves to maintain its current rate of intervention in the foreign exchange markets until early next year. Assuming this month’s elections go ahead as planned, this gives the new government a …
8th November 2011
The recent moves by the countries of the Gulf Cooperation Council (GCC) to increase the participation of their citizens in the private sector jobs market, notably Saudi Arabia’s Nitiqat scheme, are not new. However, these moves are crucial to meeting the …
3rd November 2011
October’s PMI data show that growth in the UAE’s non-oil private sector has accelerated, but it is still much weaker than that seen earlier in the year. … UAE HSBC/Markit PMI …
The combination of deepening problems in advanced economies and the legacy of political unrest earlier this year has heightened the risk of fiscal and balance of payments crises in the resource-poor Arab economies. As a result, we think that these …
2nd November 2011
October’s PMI data show that growth in Saudi Arabia’s non-oil private sector is stabilising, albeit at a slower pace than that seen earlier in the year. … Saudi Arabia HSBC/Markit PMI …
31st October 2011
With oil prices likely to fall further next year, the Qatari authorities’ decision to hedge part of their 2012 oil exports looks wise. While the government’s balance sheet is amongst the healthiest in the oil-rich Gulf region, the recent fiscal stimulus …
28th October 2011
The fact that the moderate Islamic party, Al-Nahda, is on track to become the strongest political force in Tunisia should not be a concern for Western governments or international investors. From the latter’s perspective, the principles of economic policy …
26th October 2011
The fact that there was no market reaction to the death of Libya’s former leader, Muammar Gaddafi, is no surprise. That said, today’s events could reduce political risks in the Middle East and North Africa (MENA) region, if they lead to a swifter …
21st October 2011
Emerging markets are not immune from the deepening debt crisis in the developed world, but most are well-placed to deal with the fallout. China faces a difficult structural transition of its own but, along with the rest of emerging Asia, has policy …
The drop in PMIs in Saudi Arabia and the UAE provide the first signs that the Gulf States are being hit by the on-going problems in the developed world. But the oil-rich countries have strong balance sheets and will be able to maintain stimulus spending …
20th October 2011
The rise in Saudi Arabia’s inflation to a nine-month high in September will revive speculation that stimulus spending is leading to a build up in domestic price pressures. A closer look at the data, however, suggest that these fears may be misplaced. … …
18th October 2011
There were no surprises from Egypt’s Central Bank today as the benchmark interest rate was left unchanged at 8.25%. Although the economy is still weak, and core inflation in single digits, the threat of more capital outflows remains. Therefore, we expect …
14th October 2011
The global economic crisis will affect the Middle East and North Africa (MENA) region through a deterioration in world trade, falls in commodity prices and a drop in capital inflows. We expect that GDP growth in most MENA countries will slow next year. …
September’s data show that a sharp fall in food price inflation helped to offset a rise in Egypt’s house price inflation. Accordingly, headline inflation fell for the fourth consecutive month. Meanwhile, core inflation rose. But, since it is still in …
11th October 2011
North Africa’s hefty external financing requirements, coupled with turmoil in the global financial markets, have increased the risk that the region could be hit by a balance of payments crisis. Against this backdrop, Egypt’s decision to recommence funding …
7th October 2011
September’s PMI data suggest that growth in the UAE’s non-oil private sector accelerated last month. However, the reading was still low and adds weight to our view that growth will be weaker over the coming year. … UAE HSBC/Markit PMI …
5th October 2011
September’s PMI data show that output in Saudi Arabia’s non-oil private sector is still growing. But the fact that both the headline index and the output component have hit record lows suggests that the economy is not immune from events in the global …
4th October 2011
The recent political turmoil, the so-called ‘Arab Spring’, could ultimately lead to a marked acceleration in economic growth for some parts of the Arab World. Egypt, Morocco and, to a lesser extent, Saudi Arabia have the most scope to boost their …
Following recent downward revisions to our forecasts for growth across the developed and emerging markets, we have also cut our forecasts for the Middle East and North Africa (MENA) region. We now expect GDP to grow by around 3.3% in 2012 (compared to the …
30th September 2011
Saudi Arabia’s move to allow women to vote (and run) in municipal elections, and to be appointed to the Shoura Council, is an important and positive political move. But the economic benefits are likely to be limited. The big gain to the economy would …
27th September 2011
The Arab World’s banks are better prepared to face any fallout from the global sovereign debt problems than they were during the financial crisis in 2008. Back then, the region’s financial institutions were hit hard, which played a major role in the …
21st September 2011
A further drop in the cost of housing pushed last month’s overall consumer price inflation in the UAE to its lowest level since early last year. To add to the good news, food price inflation is also starting to fall. … UAE Consumer Prices …
20th September 2011
Fresh concerns that Egypt could face a fiscal and external funding crisis over the next three years have pushed the country back to the IMF. In June, Egypt turned its back on offers of help from multilateral organisations after the Gulf States promised …
16th September 2011
August’s data show that the drop in food price inflation has helped to offset the impact of rising housing costs in Saudi Arabia. Since the food component accounts for a quarter of the consumer price basket, headline inflation has stabilised. … Saudi …
15th September 2011
August’s data show that a sharp fall in food price inflation helped to push headline inflation in Egypt down to its lowest level since the end of 2007. Core inflation also fell. But, due to concerns that the Egyptian pound may depreciate, we don’t think …
13th September 2011
The preliminary data from Egypt suggest that GDP grew by 1.8% y/y in the 2010/11 fiscal year (which runs from July to June). The output data (if not revised when more details are released on the 22nd) mean that Q2’s output was better than expected. Since …
9th September 2011
August’s PMI data show that Saudi Arabia’s non-oil private sector grew at its slowest rate since the beginning of 2010. What’s more, the output component hit a record low last month. However, despite the global economic turmoil, the Saudi private sector …
8th September 2011
August’s PMI data were disappointing, showing that the UAE’s non-oil private sector expanded at its slowest pace since May 2010. More worryingly, output was flat from the previous month. Meanwhile, producers continue to face a squeeze on their profit …
We think that the much-reported risks to the value of the foreign assets held by the Gulf Cooperation Council (GCC) countries from the US economic troubles are overstated. Admittedly, the hydrocarbon-rich Gulf economies are heavily exposed to the US …
7th September 2011
Higher oil and manufacturing revenues helped to offset the decline in Bahrain’s services sector in the second quarter of this year. What’s more, although the country’s GDP grew by only 0.8% y/y in Q2 (down from 1.8% y/y in Q1), it has performed better …
6th September 2011
