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Risks to Egypt’s debt dynamics building Egypt’s draft budget for FY2022/23 showed that officials remained committed to keeping fiscal policy tight but, with debt servicing costs rising sharply and the currency set to weaken, there are increasing concerns …
12th May 2022
Gulf to swoop in following EU-Russia oil ban With the EU set to phase out imports of Russian oil, we think there is a strong chance that the Gulf countries will eventually step in to raise output more quickly, providing a fillip to economic recoveries. …
5th May 2022
Oman to debut income tax in the Gulf Reports suggest that, despite the boost to Oman’s public finances from high oil prices, the government is sticking to fiscal tightening, with a personal income tax likely to be introduced in 2023. Under Sultan Haitham, …
28th April 2022
Egypt looks to tourism to bolster FX revenues Egyptian officials appear to be hoping for a revival of the tourism sector as part of their strategy to improve the external position, but we still think that the currency will need to weaken further. The …
21st April 2022
N. Africa: some benefits from Europe’s energy war The war in Ukraine has prompted the EU to commit to reducing its dependence on Russian gas and, as we’ve highlighted before , Algeria and Egypt stand to be two key beneficiaries. So far, Italy’s Eni S.p.A …
14th April 2022
What now for the Egyptian pound? The Egyptian pound has remained relatively stable since last month’s devaluation , which may suggest it has reached its fair value. But we still think policymakers need to move to a more flexible exchange rate and allow …
7th April 2022
What does the end of the Expo mean for Dubai? The World Expo in Dubai closes its doors today and, while it has provided a near-term fillip to the economy, we are concerned that it will leave a legacy of overcapacity in key sectors that reignites the …
31st March 2022
Egypt buttering up the IMF? Policy announcements in Egypt this week have been pinned on the spill-overs from the war in Ukraine, but they actually have been some time in the making and may be paving the way for a fresh IMF deal. At a surprise meeting on …
24th March 2022
On the verge of Iran nuclear deal 2.0 Media reports seem to suggest a revived Iran nuclear deal could be signed off imminently, which will boost global oil supplies and could put downwards pressure on prices. It may also help to ease geopolitical tensions …
17th March 2022
Russian energy embargo to provide fillip to Gulf The news this week that the West will reduce its energy imports from Russia could open the door for some of the Gulf countries to raise oil production output more quickly. This would provide a significant …
10th March 2022
Could war in Ukraine spell the end of OPEC+? Wednesday’s OPEC+ meeting was a straightforward affair, but the group will be keeping a close eye on possible sanctions on Russia’s energy exports that could pose a risk to the future of the OPEC+ deal. In a …
3rd March 2022
This morning Russia has launched an invasion of Ukraine and in this Weekly we discuss the main channels through which the conflict may affect the Middle East and North Africa. Russia’s President Putin announced earlier today that a “special military …
24th February 2022
PIF gets a (small) hold of Aramco The Saudi government’s transfer of 4% of its stake in the state oil company, Aramco, to the Public Investment Fund (PIF) will not diversify government revenues as Crown Prince Mohammed bin Salman would like to claim and …
17th February 2022
Saudi oil sector taking its foot off the brakes In a TIME interview this week, Saudi Arabia’s Energy Minister Abdulaziz bin Salman (AbS) provided the strongest signal yet that the Kingdom may eventually move to an oil policy focussed on increasing its …
10th February 2022
UAE: 2023 to be a taxing year for firms The UAE announced this week that it will introduce a corporation tax which will help to further diversify public revenues away from oil and may provide Dubai’s government with greater resources to step in if …
3rd February 2022
Egyptian structural reform push resumes Further reports that Egypt’s government and military will sell stakes or wholly privatise companies this year provide hope that structural reforms will regain momentum, but the proof will be in the pudding. Planning …
27th January 2022
Our new oil price forecasts The price of oil has risen sharply since the turn of the year and, while we still expect it to fall back by year-end, recent supply issues suggest that it will not decrease by as much as we had expected. As a result, the door …
20th January 2022
Window for Gulf fiscal loosening to close Oil prices have risen to near pre-Omicron highs this week, but we think that is likely to be short lived. As prices drop back the window for governments in the Gulf to loosen fiscal policy will shut. Brent crude …
13th January 2022
OPEC+ stays the course This week’s OPEC+ meeting turned into a fairly straightforward affair with the group opting to raise its quota by the planned 400,000bpd in February and supply is likely to increase further over the coming months. But if we’re right …
6th January 2022
A deep-dive into Saudi Arabia’s ‘austere’ budget The Saudi 2022 Budget released earlier this week revealed that the government expects to cut spending to help it run a budget surplus for the first time since 2013. But the true fiscal stance is being …
16th December 2021
Iran nuclear deal talks hit (another) bump The seventh round of talks to revive the Iran nuclear deal resumed today, having been halted on Friday as both sides failed to make headway. It appears that an agreement is a long way off, which could put upwards …
9th December 2021
Low vaccine coverage and large tourism sectors mean that the non-Gulf economies are particularly vulnerable to the emergence of the Omicron variant. Meanwhile, the drop in oil prices and the likelihood that OPEC+ raises oil output more slowly than …
2nd December 2021
What could the SPR release mean for the Gulf? The US-led release of oil reserves did little to bring down the price of oil as President Biden would have hoped and we suspect that the move is unlikely to drastically alter the outlook for the Gulf …
25th November 2021
Tunisia show little appetite for austerity Tunisia’s government upwardly revised its 2021 budget deficit target this week which, coupled with growing signs of it making concessions to appease the UGTT labour union, adds to our view that the public …
18th November 2021
Tunisia unrest adds to debt restructuring worries Developments in Tunisia over the past week further add to our view that President Saied and his government will be unable to push through much-needed fiscal reforms, making a sovereign debt restructuring …
11th November 2021
Egyptian inflation risks lie to the upside Rising wheat and gas prices have added to concerns about inflation in Egypt, raising the risk that the central bank fails to deliver the interest rate cuts that we currently anticipate next year. The government’s …
4th November 2021
OPEC+ to stick to its guns Next week’s OPEC+ meeting is set to see the group resist calls for it raise output more quickly amid high oil prices. Were output cuts to be unwound faster, that would on balance probably provide a boost to GDP growth in the …
28th October 2021
Lebanon’s long and winding road to recovery The IMF confirmed this week that technical talks with Lebanon have restarted, suggesting that the country is making tentative steps to emerge from its crisis. Prime Minister Najib Mikati has said he hoped a deal …
21st October 2021
Egypt: rising inflation to prompt CBE to stay pat The rise in Egyptian inflation last month is likely to delay a turn towards rate cuts. Figures for September, published on Sunday, showed that the headline inflation rate jumped from 5.7% y/y in August to …
14th October 2021
Rally in oil prices to end next year This month’s OPEC+ meeting went as we expected with the group raising production quotas by 400,000bpd and shrugging off pressure to increase output further. As a result, the price of Brent crude rose to over $83pb on …
7th October 2021
Oil price rally opens the door for fiscal loosening The price of oil hit its highest level in nearly three years this week and, combined with rising output, will help budget and current account positions in the Gulf will improve. This could open the door …
30th September 2021
Qatar a beneficiary of surging gas prices The recent surge in global gas prices has raised concerns in Europe about the impact on inflation and activity, but Qatar could stand to benefit on the back of rising LNG exports and prices. Stronger demand for …
23rd September 2021
Lebanon: finally turning a corner? The news that Lebanon finally formed a new government this week came as welcome relief amid the country’s economic, political and humanitarian crises . But there are still plenty of big hurdles to clear before the …
16th September 2021
Saudi bankruptcy law paying off One of Saudi Arabia’s largest conglomerates is finally on the cusp of securing a debt restructuring agreement with creditors, a sign that recent reforms are helping to speed up bankruptcies. Reports this week suggest the …
9th September 2021
Oil price rebound precedes easy OPEC+ decision This month’s OPEC+ meeting passed without much fanfare as the recent rebound in oil prices prompted the group to push ahead with raising oil output, which will help to lift the Gulf economies further. OPEC+ …
2nd September 2021
Egypt: Delta arrives as vaccinations set to speed up Fears are growing that Egypt is on the cusp of a fresh wave of COVID-19 driven by the Delta variant, but past experience suggests that restrictions will remain light touch and there is growing hope that …
26th August 2021
Gulf officials to shrug off recent dip in oil prices The latest drop back in oil prices is unlikely to be of much concern to policymakers in the Gulf and we still think that there is a window of opportunity for fiscal policy to be loosened over the next …
19th August 2021
Egypt: the Russians are coming (slowly) Egypt welcomed back Russian tourists for the first time in six years this week, which will be a relief to the ailing tourism sector, but any economic boost will be limited. Russia suspended flights to Egypt in …
12th August 2021
Egypt: price of bread set to rise The announcement that the price for state-subsidised bread in Egypt is set to be raised adds to our view that inflation will drift higher and that policymakers will hold off from cutting interest rates for now. President …
5th August 2021
The latest on Tunisia’s political turmoil Tunisia’s President Kais Saied’s power grab on Sunday has been followed by further moves that will reinforce concerns about the future of democracy in the country. Whichever way events unfold in Tunisia, the …
29th July 2021
Concerns about the Delta variant of COVID-19 have grown over the past week but high vaccine coverage in the Gulf means that policymakers are unlikely to resort to harsh containment measures. Other parts of the region are more susceptible, adding to the …
22nd July 2021
Saudi-UAE oil spat seemingly resolved Reports suggest that Saudi Arabia and the UAE have reached an agreement over oil output quotas, which will boost economic recoveries across the Gulf. In principle, the pair have agreed to the Saudi-Russia proposal of …
15th July 2021
OPEC+ fallout highlights rising Saudi-UAE tensions The failure of OPEC+ to reach an agreement over new output quotas has raised the risk that the deal collapses and the Gulf states ramp up production. This would mechanically lift GDP growth this year and …
8th July 2021
Saudi’s Transport & Logistics Strategy to fall short The National Transport and Logistics Strategy launched this week by Saudi Crown Prince Mohammed bin Salman is the latest effort to boost the non-oil sector, but it raises more concerns over whether …
1st July 2021
Kuwaiti budget could be a sign of things to come Kuwait’s FY2021/22 budget that was approved this week added to signs from the Gulf that high oil prices are prompting a shift to looser fiscal policy. In a feisty parliamentary session on Tuesday, the …
24th June 2021
Hajj restrictions to delay the Saudi recovery The Saudi government confirmed this week that the Hajj pilgrimage will be at very limited capacity, which will weigh on the Kingdom’s economic recovery. Saudi has barred all foreign pilgrims from attending …
17th June 2021
Egypt’s vaccine rollout still has a long way to go Egypt’s vaccine production has got underway which, the authorities hope, will allow the vaccination programme to speed up. But there is still a long way to go to achieve anything close to herd immunity …
10th June 2021
Rising oil prices to open door for fiscal loosening? Oil prices hit their highest level in more than two years this week and, combined with higher oil output over the rest of this year, will help to rein in large twin budget and current account deficits …
3rd June 2021
Bahrain and COVID-19: a canary in the coalmine? The surge in COVID-19 cases in Bahrain has forced the government to tighten restrictions to curb the spread of the virus, which will delay its recovery and highlights that vaccination programmes elsewhere …
27th May 2021
Iran nuclear deal edges closer If reports suggesting that the Iran nuclear deal will be revived (perhaps as soon as next week) prove right, the lifting of sanctions would probably weigh on oil prices as Iran ramps up production, but geopolitical tensions …
20th May 2021