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The escalation of the conflict between Israel and Iran has largely been shrugged off by the oil market and risk premia in the Gulf remain low. Even so, growth will remain weak in the Gulf this year. There will be bigger macro consequences from …
24th April 2024
The past month has seen Egypt’s economic crisis turn around with the devaluation of the pound, aggressive interest rate hike, and unlocking of a new IMF deal. There have been false dawns before, but this shift back toward economic orthodoxy feels more …
27th March 2024
Economic growth in the Middle East and North Africa will strengthen a little this year but is likely to come in well below consensus expectations. OPEC+’s output cuts should gradually reverse from the end of this quarter but will keep a lid on economic …
26th February 2024
Economic growth in the Middle East and North Africa will strengthen a little in 2024 but is likely to come in well below consensus expectations. OPEC+’s cautious approach to oil policy will keep a lid on economic growth in the Gulf over the first half of …
30th January 2024
This is a special Global Economics Chart Pack that provides clients with key analysis to make sense of the macro and market impact of the disruptions to maritime shipping. The charts in this document come from our brand-new shipping dashboard , which …
25th January 2024
18th December 2023
After a sharp slowdown this year, GDP growth across the Middle East and North Africa will improve in 2024 as OPEC+ starts to reverse recent oil output cuts, while fiscal policy in the Gulf remains supportive. Outside of the Gulf, balance of payments …
28th November 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
28th September 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
Our latest Chart Pack on the Middle East and North Africa is embedded below. Economic growth across the region will be much weaker this year than last and our forecasts are generally below the consensus. The latest round of OPEC+ oil output cuts will …
12th July 2023
The hit to tourism in the region from the COVID-19 pandemic finally appears to be over. Receipts and arrivals are now back to, or even above, seasonal norms in almost all countries. This will be welcome news for Saudi Arabia as the annual Hajj pilgrimage …
27th June 2023
The flash Q1 GDP figures for Saudi Arabia showed the economy grew at its weakest pace in two years at the start of 2023, reflecting the cut in oil production in line with the OPEC+ decision in October. And the even more recent voluntary output reductions …
24th May 2023
Balance of payments strains have prompted Egypt, Morocco and Tunisia to turn to the IMF over the past six months or so, but agreements in Egypt and Tunisia are faltering. The IMF postponed its first review of Egypt’s deal amid the government’s slow …
26th April 2023
One of the main channels through which the Gulf countries are exposed to worries about the health of the global banking system in through energy markets, with the price of Brent crude falling by 13% so far this month. If prices were to stay at current …
24th March 2023
After a stellar performance for most of 2022, the Gulf economies are slowing. Primarily, that has reflected the impact of oil production cuts agreed with the rest of OPEC+ which is weighing on growth in oil sectors. And in the UAE and Qatar at least, the …
23rd February 2023
The further falls in the Egyptian pound over the past month will push up inflation and prompt the central bank to deliver more monetary tightening, but there are already signs that the benefits of a weaker currency are materialising. The government …
31st January 2023
The slide in the price of oil since November has a little further to go in early 2023 and, while we think prices will recover later in the year, hydrocarbon revenues in the Gulf will be lower than this year. Even so, most of the Gulf economies will run …
21st December 2022
Economies across North Africa have endured severe balance of payments strains this year and governments in Egypt and Tunisia finally secured staff-level agreements with the IMF over the past month. Markets have welcomed the news with sovereign dollar bond …
23rd November 2022
OPEC+ cut its oil production quotas by 2mn bpd in November and strong compliance with the agreement will hit GDP growth in the Gulf economies harder than other members of the group. The result is that the region is now set to endure a sharper economic …
26th October 2022
The Egyptian pound has continued to weaken as the central bank (CBE) has taken tentative steps towards a more flexible exchange rate, and we think that the currency needs to weaken further to address the country’s external imbalances. Measures to tackle …
29th September 2022
Headline inflation has risen further across the region in recent months. This has been most pronounced in the non-Gulf economies which have been particularly exposed to spillovers from the war in Ukraine due to their positions as large net commodity …
30th August 2022
The recently-released activity data from Saudi Arabia, the UAE, Qatar, and Bahrain confirmed that strong hydrocarbon production supported rapid economic growth at the start of this year. And strong growth is likely to be sustained over the coming …
27th July 2022
Risk-off sentiment and the sell-off in EM financial markets have hit the Middle East and North Africa hard. Having been the top regional performer earlier in the year, the MSCI Arabian Markets Index has fallen by nearly 20% since mid-April. Sovereign …
24th June 2022
A majority of central banks in the region hiked interest rates over the past month. In the Gulf, central banks raised interest rates in line with the Federal Reserve, although this won’t necessarily curb demand in the region. Credit growth tends to …
26th May 2022
Tighter global monetary conditions and spillovers from the war in Ukraine have caused public debt problems to worsen in several emerging markets, and the MENA region is not immune to this. Within the region, Tunisia’s public debt position is most fragile …
28th April 2022
The spillovers from the war in Ukraine in the form of higher commodity prices will have contrasting impacts on the Gulf and the rest of the region. We estimate higher energy prices will boost Gulf hydrocarbon export revenues by around 10% of GDP this year …
30th March 2022
The Gulf economies are key beneficiaries from the rise in energy prices caused by the Russia-Ukraine crisis. On an annualised basis, oil at $100pb would increase hydrocarbon export revenues by 7-10%-pts of GDP across the Gulf (relative to 2021). This …
28th February 2022
Central banks in the Gulf will have to raise interest rates in line with the Fed (which we expect to hike four times both this year and next) by virtue of their dollar pegs, adding to headwinds facing non-oil sectors. Outside the Gulf, the main risk is …
28th January 2022
Governments across the Gulf have begun to unveil their 2022 budgets and tight fiscal policy remains the order of the day. Saudi Arabia outlined a 6% cut in spending next year that is expected to push the budget into surplus for the first since 2013. And …
15th December 2021
The Middle East and North African economies are potentially among the most vulnerable to the fallout from the Omicron strain of COVID-19 . The North African economies as well as Lebanon and Jordan have low vaccination rates and large tourism sectors, …
30th November 2021
The Gulf countries will be among the biggest winners globally from the recent rally in energy prices but most other parts of the Middle East and North Africa are net oil importers and are likely to be negatively affected. Higher energy prices will push up …
27th October 2021
Inflation in many economies in the region has risen to multi-year highs in recent months. In general, this has been driven higher by a combination of unfavourable base effects from the pandemic, as well as some re-opening inflation and the effects of …
28th September 2021
High levels of vaccine coverage have paved the way for policymakers across the Gulf to lift measures to contain COVID-19 over the past month or so. The UAE remains ahead of the pack in the vaccine race and has started to deliver booster jabs in recent …
26th August 2021
The end of the impasse within OPEC+ this month will result in higher oil output and boost recoveries in the Gulf over the second half of this year and in 2022 . Output quotas will rise by 400,000bpd each month after the UAE backed down in return for …
28th July 2021
The price of oil has continued to rise and will help to improve balance sheets in the Gulf. With oil prices at $75pb, all Gulf economies with the exceptions of Bahrain and Oman are likely to be running current account surpluses, having run deficits in …
24th June 2021
Headline inflation rates have increased in almost all countries in the region since the turn of the year reflecting a combination of price pressures as economies re-open, higher food inflation and tax changes, as well as unfavourable base effects created …
27th May 2021
The Gulf economies, as well as Morocco, lead the way when it comes to COVID-19 vaccination programmes in the region. The UAE, Bahrain, and Qatar have provided at least one dose to more than half of their population, while Morocco, Saudi Arabia and Kuwait …
28th April 2021
The recent rise in COVID-19 cases in the region adds to reasons to think that a recovery in tourism is some way off. Governments across the world seem, in any case, appear increasingly reluctant to open up to international travel amid fears of importing …
25th March 2021
Dollar bond issuance in the Gulf has got off to a quick start this year with Saudi Arabia, Oman, and Bahrain selling a total of $10.25bn of bonds in the past month. If oil prices continue to rise, as we expect, budget deficits will narrow and reduce …
23rd February 2021
Governments across the Middle East and North Africa have begun the roll out of COVID-19 vaccines with parts of the Gulf making a particularly strong start. The UAE and Bahrain have already administered vaccines to around 26% and 8% of their populations, …
26th January 2021
The OPEC+ agreement earlier this month to increase oil supply will mean that downturns in hydrocarbon sectors across the Gulf will start to ease. And, of course, the Gulf countries will also benefit from higher prices – Brent crude broke through $50pb …
18th December 2020
The positive news on COVID-19 vaccines in recent weeks has helped to lift the near-term outlook for the Middle East and North Africa. For the Gulf countries, oil prices have picked up with Brent crude reaching its highest level since March and we think …
24th November 2020
The latest OPEC oil production figures continue to show that several countries are overproducing, which is making Saudi Arabia – which has borne the brunt of production cuts – increasingly frustrated. For now, at least, countries are making compensatory …
26th October 2020
Oil prices suffered a fresh bout of weakness this month amid growing concerns over rising global coronavirus cases, which reinforces our view that economic recoveries in the Gulf will be slow. At the recent OPEC ministerial meeting, the cartel emphasised …
23rd September 2020
The recovery in oil prices from their nadir in April has not prompted policymakers in the Gulf to row back on their plans to push through fiscal austerity. Saudi Arabia suspended the Cost of Living Allowance in June and also delayed or cancelled capital …
26th August 2020
The Gulf economies have been the epicentre of the coronavirus outbreak in the region but almost all countries have managed to put new daily cases on a downwards trend thanks to strict containment measures and aggressive testing. In contrast, new cases are …
31st July 2020
Governments across MENA have taken steps to re-open economies over the past month and, after a sharp downturn in April and May, daily indicators suggest that economic activity has started to recover. That said, activity remains well below pre-virus …
24th June 2020
The rapid spread of the coronavirus in the region means that plans to lift lockdowns have come later than in many other EMs and the damaging economic effects of social distancing have persisted. The Gulf economies have also suffered from the effects of …
28th May 2020
The early signs from the Middle East and North Africa are that efforts to contain the coronavirus and the collapse in oil prices are dealing a heavy economic blow. Whole economy PMIs plunged to record lows in March, flight cancellations are widespread and …
30th April 2020
