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Egypt’s make or break moment This week saw positive news in Egypt regarding the public finances and the privatisation drive. But next week’s MPC meeting will prove critical as to whether policymakers can get out of the economic crisis. Finance Minister …
11th May 2023
Note: We’re holding a special 20-minute online briefing all about EM debt risks this Thursday at 10:00 EDT/15:00 BST . Register now . Oil prices: “Don’t get cocky OPEC+” The price of oil has dropped sharply this week on fears about the health of the …
4th May 2023
With Egyptian policymakers dawdling on the IMF’s reform demand, pressure is growing for another devaluation of the pound and investors are increasingly fearing that a sovereign default could follow. For now at least, there is still a path out of the …
27th April 2023
Aramco transfer accelerates under Vision 2030 plan Saudi Arabia’s government transferred a further 4% of Aramco to the Public Investment Fund (PIF) this week as part of its efforts to diversify its revenues away from oil as part of Vision 2030. But there …
20th April 2023
Inflation nearing a peak but devaluation fears linger Egyptian inflation rose to its fastest pace since mid-2017 in March and, while there are signs it could be nearing its peak, mounting pressure on the pound presents a clear upside risk. Data released …
13th April 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . H2-oh… Droughts in the Middle East and North Africa are becoming more frequent and more severe, with Morocco and Tunisia experiencing them right now. …
30th March 2023
Crisis of confidence at crunch CBE meeting The Central Bank of Egypt’s decision in February to leave interest rates on hold looks to have been a policy misstep and, with inflation surging and growing concerns over the commitment to orthodox policymaking, …
23rd March 2023
The newsflow this week has been dominated by the problems at Silicon Valley Bank (SVB) and Credit Suisse which have raised concerns over the health of the global banking system. If concerns continue to mount, this would pose downside risks to currencies …
16th March 2023
The future of OPEC+ on the table once more Reports have re-emerged in the past week that the UAE may be seeking an exit from OPEC+ and, if the group persists with its current quotas, tensions could boil over. This would support our view that oil …
9th March 2023
Egypt’s government feeling the hit Recent falls in the pound and rising borrowing costs forced Egypt’s Ministry of Finance to revise up its targets for debt and the budget deficit earlier this week, but we remain of the view that the government will be …
2nd March 2023
Morocco: drought, food, inflation and unrest The effects of another severe drought in Morocco have weighed on growth, pushed up inflation and fuelled pockets of unrest, but strong rainfall provides hope that the worst may soon be over. The drought that …
23rd February 2023
Dubai’s GREs well positioned to meet debts for now The pick-up in Dubai’s economy over the past year or so has provided a better environment for government-related entities (GREs) to service large debts. But while repayments shouldn’t be much of an issue …
16th February 2023
PIF increasingly leaned on to drive Saudi investment Saudi Arabia’s Q3 balance of payments data showed that the Kingdom’s current account surplus boomed on the back of stronger oil receipts. Most of that surplus is still being recycled by the Public …
9th February 2023
Proof will be in the pudding for Egypt’s privatisation Egypt’s Prime Minister Mostafa Madbouly revealed this week that twenty state-owned companies would be sold over the course of this year which adds to the positive momentum on reforms. It remains to be …
2nd February 2023
OPEC+ cuts to dampen Gulf growth in early 2023 OPEC+ is widely expected to agree to continue with its existing oil output quotas next week, although this means that oil sectors will act as a drag on the Gulf economies over the early part of this year. …
26th January 2023
Petroyuan” talk further sign of frayed Saudi-US ties Comments by Saudi Arabia’s finance minister that the Kingdom could conduct trade in currencies other than the dollar will add fuel to the debate about the rise of a “petroyuan”. There are hurdles to the …
19th January 2023
Has the EGP gone too far once again? The Egyptian pound has pared back its losses after sharp falls against the dollar on Wednesday in a sign that, just like 2016, the currency may have overshot. The authorities may keep the pound weak in a bid to rebuild …
12th January 2023
The latest fall in the Egyptian pound sends a strong signal that the authorities are committed to the shift to a more flexible exchange rate. And while the weaker currency poses a threat to the country’s fragile public debt dynamics, investors seem to …
5th January 2023
Tunisia’s debt problem: resolution further away? Parliamentary elections in Tunisia last weekend saw only 9% of the electorate turn out to vote after a boycott by opposition parties. The new parliament will be dominated by independent politicians, which …
22nd December 2022
Is the CBE eyeing up another surprise meeting? The IMF’s Executive Board meet on Friday to approve Egypt’s deal, and there are rumours the Central Bank of Egypt (CBE) could meet today to deliver a surprise aggressive interest rate hike. The CBE is …
15th December 2022
Egypt getting its IMF deal, but Tunisia made to wait The IMF will formally sign off on its deal with Egypt next week, but Tunisia’s deal remains up in the air, increasing the threat of a messy sovereign default. As we highlighted when the staff-level …
8th December 2022
OPEC+ keeping the world on its toes Eyes will turn to OPEC+ on Sunday and, while there have been contrasting reports that oil output could be raised or cut further, it looks increasingly likely that October’s agreement will be rolled over. But we don’t …
1st December 2022
OPEC+ schisms growing as Saudi doubles down The volatility of oil prices has highlighted the uncertainty over the current OPEC+ oil output agreement and adds to our view that we do not think it will make it to its end-2023 expiry date. The price of Brent …
24th November 2022
Egypt’s privatisation drive stepping up a gear? Egypt’s state ownership policy document finalised could come into effect before the end of 2022, but it remains to be seen whether the latest privatisation drive will better the fortunes of ones before. The …
17th November 2022
Egypt steps up renewables push at COP27 With the COP27 climate summit underway in Sharm El-Sheikh, Egypt announced it will build one of the world’s largest onshore wind farms with financing from the UAE as it steps up its green energy shift. The farm will …
10th November 2022
Saudi liquidity fears solidifying Saudi interbank rates (SAIBOR) have surged recently as liquidity conditions in the banking sector have tightened again. With no sign yet that the central bank (SAMA) is about set to step in, credit growth could slow and …
3rd November 2022
This week ended with a bang as Egypt finally shifted to a more flexible exchange rate and secured an IMF deal. Some short-term economic pain is on the cards, but the move will help to restore macro stability and brighten long-term prospects. Early this …
27th October 2022
Tunisia still has work to do for IMF deal approval The IMF stated last weekend that Tunisia reached a staff-level agreement for a new deal, which (if approved) will reduce concerns that Tunisia might follow in Sri Lanka ’s footsteps towards a messy …
20th October 2022
US-Saudi relationship dials back Developments since last week’s OPEC+ decision provide further evidence that the relationship between Saudi Arabia and the US has soured. (See our immediate take on it here .) Chair of the US Senate Foreign Relations …
13th October 2022
OPEC+ cut to hit Gulf GDP growth; irks US The decision by OPEC+ to cut its oil output quotas by 2mn bpd on Wednesday poses a clear downside risk to our Gulf GDP growth forecasts, and it has also raised tensions between Saudi Arabia and the US. The oil …
6th October 2022
OPEC+ weighing up a further output cut The latest reports suggest OPEC+ is seeking to follow up last month’s surprise 100,000bpd cut to oil output quotas with another reduction next week, increasing the downside risks to our Gulf GDP growth forecasts. …
29th September 2022
UAE seeking to accelerate oil ramp up Reports that the UAE is aiming to increase oil production capacity faster as peak oil demand draws closer could create tensions within OPEC+ over the group’s cautious approach to output quotas The Abu Dhabi National …
22nd September 2022
Rate hikes on the way across MENA A raft of central banks across the region look set to raise interest rates next week as those with dollar pegs follow the US Fed and we also hold a non-consensus view that the Central Bank of Egypt will resume its …
15th September 2022
OPEC+ oil output cut affirms cautious approach The decision by OPEC+ to follow through with suggestions of a 100,000bpd cut to its oil production quotas on Monday shows the group has grown wary of the weakening global economic backdrop. This is likely …
8th September 2022
Egypt to let the pound fall more quickly Comments from officials suggest that the Central Bank of Egypt (CBE) is pressing forward with its shift to a more orthodox exchange rate policy that, coupled with the increased likelihood of an IMF deal , should …
1st September 2022
What does Egypt need to do to get an IMF deal? Egypt’s Prime Minister Mostafa Madbouly said earlier this week that talks with the IMF over a new deal were in their “final stages” and the hurdles to securing a deal are not particularly high. We have …
25th August 2022
Amer departs… The resignation of Central Bank of Egypt (CBE) Governor Tarek Amer yesterday has further increased scrutiny of the country’s exchange rate policy. A weaker pound is clearly needed, preferably under an IMF deal, but there is a clear risk that …
18th August 2022
PIF stumping up the cash for Egypt Saudi Arabia’s Public Investment Fund (PIF) established an arm in Egypt this week and has moved quickly to purchase stakes in several firms, which will help to ease external financing concerns. But a weaker pound is …
11th August 2022
Does Egypt really want an IMF deal? Egypt’s Finance Minister Mohamed Maait argued this week that any financing agreement with the IMF would be much smaller than some analysts’ estimates. If anything, Egypt could be hinting that it does not want IMF …
4th August 2022
Gulf would benefit from possible OPEC+ policy shift Next week’s OPEC+ meeting may provide the first hints of the group’s production policy beyond September and if, as we expect, they opt to remove quotas, the Gulf stands to benefit most. On its current …
28th July 2022
Referendum a key step in president's power grab Tunisians will vote on proposed constitutional amendments on Monday, which could cement President Saied’s one-man rule. This may further deter foreign investment, compounding the country's economic problems. …
21st July 2022
Biden looks to Saudi for a helping hand US President Joe Biden will head to Saudi Arabia on Friday in an effort to mend a frayed relationship between the two countries and, probably, to push for the Kingdom to raise oil output more quickly. President …
14th July 2022
A tough month for oil The price of Brent crude has fallen over the past month as global recessions fears have mounted but, while we think oil prices will fall over the next few years, they will remain elevated by recent levels. Since reaching a high of …
7th July 2022
Food security fears ease, but debt worries remain Financing from the World Bank this week will cover some of the extra cost to Egypt and Tunisia of wheat imports, but it will not fully alleviate balance sheet strains emanating from the war in Ukraine and …
30th June 2022
What will OPEC+ do from September? OPEC+ may drop some hints about the future for the group’s oil output beyond September at its meeting next Thursday. We think the group is likely to remove the shackles, and the Gulf stands to be a major beneficiary. …
23rd June 2022
Two sides of the coin for MENA as Fed hikes by 75 Even though central banks in the Gulf have followed the US Fed in hiking interest rates, the early signs are that these economies have weathered the impact well so far. In contrast, the non-Gulf economies …
16th June 2022
Saudi and the UAE to benefit from OPEC+ fallout OPEC+’s decision last week to accelerate the pace at which it is raising its oil production quota lays the ground for Saudi Arabia and the UAE to capitalise to increase output quicker, which will provide a …
9th June 2022
Gulf states to step up oil output increases? Reports that OPEC+ may suspend Russia from its oil output deal reinforce our view that the Gulf states will raise production faster later this year. The West has increased pressure on OPEC+ to rethink the …
1st June 2022
Saudi gearing up to loosen the purse strings Comments from Saudi Arabia’s finance minister this week provide some hints that the fiscal purse strings could soon be loosened if oil prices remain elevated. Finance Minister Mohammed al-Jadaan said that the …
26th May 2022
Tunisia: further rate hikes needed The central bank of Tunisia (BCT) joined the region’s tightening cycle this week, in part to shore up the dinar and mitigate the risks stemming from the currency to the public finances. But we doubt that this will …
19th May 2022