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Tensions within OPEC+ rise as threat of cut looms OPEC+ was meant to be in the spotlight this weekend but, in a surprise move, the meeting has been delayed until Thursday. The slide in oil prices and the Israel-Hamas conflict suggest that output quotas …
23rd November 2023
Saudi’s new Civil Code another step to attract FDI In a month’s time, Saudi Arabia’s new Civil Code will come into force in a bid to further entice foreign investors to the Kingdom, but more is required to hit Vision 2030 targets. The Civil Code contains …
16th November 2023
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
The latest Saudi GDP data paint a downbeat picture in which the recession has deepened amid oil output cuts. But the good news is that the recession looks to be coming to an end. And we think the economy will begin to recover over the coming quarters as …
15th November 2023
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Saudi Arabia’s headline inflation rate edged down from 1.7% y/y in September to 1.6% y/y in October, the weakest pace of inflation in nearly two years, and …
Data over the weekend showed that Egypt’s inflation rate slowed, confirming that September marked the peak, and our baseline scenario is that it will continue to drop back as we head into 2024. The main risk to our view is that there is a disorderly …
13th November 2023
Saudi’s FDI revision paints a slightly better picture The Saudi Press Agency released a statement on Tuesday revealing that foreign direct investment (FDI) into the Kingdom has been much stronger than previously thought. But there is still work to be done …
9th November 2023
Persistent balance of payments strains brought pressure on some of the region’s non-oil producing countries who employ fixed exchange rate regimes. FX reserves have been depleted to support currencies and, in some cases, these are insufficient to cover …
The past few years have seen Saudi Arabia continue to move away from the US orbit and, as part of our work on global fracturing, we no longer consider Saudi to be unaligned between the US and China. Instead, we now think that it leans more towards …
7th November 2023
CBE stands pat as all eyes turn to post-election meeting The Central Bank of Egypt (CBE) left its overnight deposit rate at 19.25% today but, with pressure on the pound mounting and inflation still well above target, there’s a good chance that …
2nd November 2023
Egypt’s gas troubles after Israel cuts supplies Egyptian officials confirmed this week that imports of gas fell to zero after Israel turned off the taps, which will curtail efforts to restart LNG exports. And with gas being cut to energy-intensive …
Morocco’s automobile sector has gone from strength to strength in the past decade, with production now rivalling some producers in Central and Eastern Europe. With investment from major global automobile firms increasing and supply chains deepening, the …
31st October 2023
Recession deepens on the back of voluntary oil production cut Saudi Arabia’s flash GDP estimate showed that the recession deepened in Q3, with GDP contracting by 3.9% q/q, after the Kingdom implemented an additional voluntary 1mn bpd oil output cut and …
Saudi real estate market stuck in a gully The mortgage market in Saudi Arabia has struggled this year as interest rates have surged, which appears to be adding to the trend of the past few years of suppressed land and house prices. Data published over the …
26th October 2023
After a sharp slowdown this year, GDP growth across the Middle East and North Africa will improve in 2024 as OPEC+ starts to raise its output quotas and high oil prices allow the Gulf economies to keep fiscal policy supportive. Outside of the Gulf, …
24th October 2023
Tunisia is stuck in a deep economic and political crisis, and with the IMF’s staff-level agreement yet to be approved, and it is only likely to get worse. We have long held the view that Tunisia is heading toward a messy balance of payments crisis and …
23rd October 2023
Could Egypt’s financing fears be set to ease? Reports over the past week have suggested that Egypt could be poised to leverage its position in the region to receive financial support in exchange for helping to de-escalate the Israel-Hamas conflict . …
19th October 2023
It has been almost a year since Egypt reached a staff-level agreement with the IMF, but progress on key policies that form part of the program has stalled. The pound has been a de-facto peg since January. And the Fund has delayed two tranches of …
17th October 2023
Saudi Arabia’s economy is in a recession and, with oil output cuts extended until the end of this year at least, GDP will contract further. We think that the economy will shrink by 1.3% this year which is towards the bottom of the consensus range and …
16th October 2023
The outbreak of conflict between Hamas and Israel this week has not yet spilled over into the wider region. But the situation is in flux and, if Iran is pulled into direct conflict, the ramifications for the region would be a lot larger. Since we …
12th October 2023
The conflict between Hamas and Israel will negatively affect Israel’s natural gas exports. However, the bigger concern for global natural gas prices is the risk of the conflict spreading. The European natural gas price has risen by about 30% w/w to €48 …
Despite a marked improvement in Egypt’s current account deficit, the pound’s de-facto peg is deterring critical capital inflows and adding to concerns over large external financing needs. A fresh devaluation and a commitment to a flexible exchange rate …
10th October 2023
This report has been updated with additional analysis, as well as a chart and table of the key data. Inflation at or close to its peak Egypt’s headline inflation rate picked up from 37.4% y/y in August to a fresh multi-decade high of 38.0% y/y in …
The attack by Hamas on Israel on Saturday has led to widespread casualties and deaths, and the declaration of war by Israel’s prime minister. From an economic perspective, the experience from the 2014 Gaza war suggests that the effects on Israel’s economy …
9th October 2023
Al-Sisi confirms his running; UAE opens swap line Egypt’s incumbent President al-Sisi has confirmed he will run for re-election in December in a race that he is almost certain to win. The policy paralysis induced by this election has prompted central …
5th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
Saudi Arabia’s labour market has strengthened markedly in its post-pandemic recovery and the headline figures mask a dramatic shift in the size and composition of the labour force. In particular, social reforms have helped the female participation rate to …
This report has been updated with additional analysis, as well as a Chart of the key data. Gulf non-oil sectors cushioning slowdown; Egypt’s economy sputtering along The September release of PMIs for the Middle East and North Africa showed that activity …
3rd October 2023
Saudi Arabia’s 2024 pre-Budget statement reaffirmed the government’s commitment to sustaining its loose fiscal stance, with the government now projecting budget deficits all the way out to 2026. That shouldn’t cause any problems given the Kingdom’s strong …
2nd October 2023
Will December’s election pave way for EGP move? Egypt’s National Election Authority confirmed this week that the presidential election will take place in December. As we highlighted , this adds to reasons to think the shift to orthodoxy will remain on …
28th September 2023
Overview – After a sharp slowdown this year, GDP growth across the Middle East and North Africa will improve in 2024 as OPEC+ starts to raise its output quotas and high oil prices allow the Gulf economies to keep fiscal policy supportive. Outside of the …
25th September 2023
Is Egypt set for the polls before year-end? Reports that Egypt’s presidential election, originally scheduled for 2024, could be held before the end of this year may help to explain the recent policy paralysis with regards to the pound. The National …
21st September 2023
Yesterday, we hosted a Drop-in webinar taking a closer look at the state of play in Egypt and whether the country can get its IMF deal back of track. You can view on-demand here . This Update addresses some of the questions we received during the event. …
14th September 2023
All eyes on the CBE The Central Bank of Egypt (CBE) resumed its tightening cycle in August and, with inflation rising further, we expect interest rates to be hiked again. More than anything, though, investors will be looking for any shift in the exchange …
We have updated this webpage with additional analysis, as well as a Chart and Table of the key data. Inflation slows to weakest pace in a year and will ease further Saudi Arabia’s headline inflation rate slowed from 2.3% y/y in July to 2.0% y/y in August, …
The devastating earthquake that hit Morocco on Friday evening has severe humanitarian consequences, but, from a purely economic standpoint, it should only have a small and short-lived impact on GDP. The spillovers are also set to be limited on Morocco’s …
11th September 2023
Saudi oil output cut rollover a significant GDP hit Earlier this week Saudi Arabia confirmed that it will extend its additional voluntary 1mn bpd oil output cut until the end of this year which will result in a significant hit to economic growth this …
7th September 2023
Reports are swirling of yet more delay to the latest review of Egypt’s IMF deal, the central bank is preparing to meet in a pressurised market environment and speculation about a sovereign default isn’t going away. Deputy Chief Emerging Markets …
This report has been updated with additional analysis and a chart of the key data. Gulf non-oil sectors cooling off, Egyptian inflation pressures still building August’s batch of PMIs for the region showed that activity in non-oil private sectors in the …
5th September 2023
What’s driving the slide in SAMA’s assets? The drop in the Saudi Central Bank’s (SAMA) foreign assets to a 14-year low in July caused some concern this week, but we suspect this reflects funds being recycled to the Public Investment Fund. Figures …
31st August 2023
On the face of it, Morrocco’s public finances are starting to look alarming. The budget deficit has widened and the public debt-to-GDP ratio has jumped by over 10%-pts in less than three years. But a deeper dive suggests that there isn’t cause for …
30th August 2023
Equities in Europe, the Middle East and Africa (EMEA) have returned little in US$ terms so far this year. While they may fare better next year, we doubt they’ll outperform the wider emerging equity market. Equities in EMEA, although marginally ahead of …
29th August 2023
Time for a new acronym Earlier today it was confirmed that Saudi Arabia, the UAE, Egypt, Iran, Argentina, and Ethiopia were all being invited to join the BRICS bloc and, while this is unlikely to have major economic effects in the near term, the possible …
24th August 2023
Oil output cuts are driving a sharp slowdown in economic growth across the Gulf. The hit to volumes will more than offset the rebound in oil prices but, for now at least, fiscal policy is being kept loose and this will continue to support strong …
21st August 2023
Egypt: debt jumps, but primary surplus widens Data released this week showed that Egypt’s public debt ratio jumped in the last fiscal year, but a further improvement in the primary budget position reinforces our view that the government will be able to …
17th August 2023
This webpage has been updated with additional analysis, as well as a Chart and Table of key data. Inflation slows to weakest pace in a year and will ease further Saudi Arabia’s headline inflation rate eased from 2.7% y/y in June to 2.3% y/y in July, the …
15th August 2023
Oil output cuts fuelled Saudi Arabia’s economic downturn in the first half of 2023 and the drag from the oil sector appears to have intensified more recently. Taking together with signs that activity in the non-oil sector is cooling, the Kingdom’s …
14th August 2023
Aramco’s profit slump ≠ austerity The slump in the profits of Saudi Arabia’s state oil company, Aramco, in Q2 has focussed attention on the deterioration in the Kingdom’s budget position. But the authorities appear to be taking as many steps as possible …
10th August 2023
Inflation hits fresh record high, CBE has more work to do Egypt’s headline inflation hit a fresh record high of 36.5% y/y in July and, with a fresh devaluation of the pound on the cards in the coming months, it will remain elevated for some time. The …
