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UAE property sector turnaround? The downturn in the UAE’s real estate sector appears to have bottomed out. But we still hold concerns that increasing supply will exacerbate overcapacity and put further strain on banks’ balance sheets. This week, property …
13th May 2021
Tunisia: still a long way to go in IMF negotiations Tunisia’s government has jump started talks with the IMF over a fresh financing package but it may prove difficult to secure. If the talks fall apart, Tunisia would be pushed towards a messy balance of …
6th May 2021
Saudi Arabia’s Crown Prince Mohammed bin Salman (MbS) gave a rare TV interview this week to mark five years since the launch of the Vision 2030 reform plans. There were four points to take away. The first is that recent fiscal tightening may be reversed. …
29th April 2021
Saudi privatisation drive picking up pace The Saudi government is speeding up its privatisation drive, which will help to finance the budget deficit. But the authorities’ continued reliance on the Public Investment Fund (PIF) to drive investment risks …
22nd April 2021
Iran nuclear deal talks off to a bumpy start Hopes of a positive start to talks on reviving the Iran nuclear deal were dampened after Iran announced plans to increase uranium enrichment, highlighting that negotiations have a long way to go. If the deal is …
15th April 2021
Royal intrigue in Jordan The royal turmoil in Jordan this week couldn’t come at a worse time for the economy and, if allegations of corruption spur unrest, this would raise serious fears over the country’s poor external and budget positions. But the IMF …
8th April 2021
Shareek program aims to boost Saudi investment Saudi Arabia launched a new investment drive this week that aims to boost the role of the private sector in the economy over the next decade. But, while this may drive diversification efforts, there is a risk …
1st April 2021
Oman more proactive with austerity than Bahrain Recent developments have highlighted the contrasting efforts of Bahrain and Oman in addressing their fragile public finances and placing balance of payments positions on a more sustainable footing. In both …
25th March 2021
Lebanon’s crisis deepens The long-running crisis in Lebanon hit a fresh low this week as the currency collapsed and the government scaled back subsidies. With the formation of a new government nowhere in sight, the crisis shows no signs of turning around …
18th March 2021
Attacks on Saudi oil facilities still present risk The recent attacks directed at Saudi oil infrastructure pushed up global oil prices earlier this week and highlighted the lingering risk to the economic outlook from such incidents. On Sunday, the Houthi …
11th March 2021
OPEC+ meeting unlikely to spring a surprise The OPEC+ meeting later today could see the group opt to roll over its production cuts into April (rather than easing quotas) which would push back the recovery in GDP growth in the Gulf’s oil producers a …
4th March 2021
Efforts to revive Iran nuclear deal begin The Biden administration has taken the first steps to try to revive the Iran nuclear deal and, while there remain major hurdles, this could put downward pressure on oil prices. This is unlikely to be a major …
25th February 2021
Saudi’s “Programme HQ” not convincing Saudi Arabia this week formally adopted a carrot and stick approach to entice more foreign firms to set up in the Kingdom, but the plan is ambiguous in many areas and does not appear to support some of the …
18th February 2021
Oil at $60pb and the implications for the Gulf Oil prices hit their highest level in over a year this week and, if this is sustained as we expect, the Gulf countries will benefit as oil output is raised and officials hold back from further harsh …
11th February 2021
Kuwait budget fears: a storm in a teacup? Kuwait’s budget laws have created problems financing the deficit that are now reaching a crunch point, but it seems most likely that the government will be able to get around these. Low oil prices have forced …
4th February 2021
Saudi: squeezing SAMA to fund PIF The change at the helm of the Saudi Central Bank (SAMA) adds to signs that the government will lean more heavily on SAMA to support its efforts to diversify investments and the Saudi economy. SAMA Governor Ahmed …
28th January 2021
Tunisia: protests will make reforms harder to pass Protests that have swept across Tunisia over the past week bring back memories of the revolution a decade ago. While there’s a lot of uncertainty about how these will develop, one point we can make at …
21st January 2021
Tunisia on the verge of new IMF deal? Tunisian Prime Minister Hechem Mechichi confirmed this week that the government is set to launch a package of reforms in a sign that the authorities are gearing up to secure a new IMF deal. Fiscal consolidation will …
14th January 2021
Saudi cuts, but OPEC+ tensions still simmering Saudi Arabia’s surprise voluntary oil output cut unveiled at this week’s OPEC+ meeting has lifted oil prices, but even so GDP growth will probably be weaker in Q1 than previously expected. After much acrimony …
7th January 2021
COVID-19: Light at the end of the tunnel COVID-19 outbreaks have started to come under control in recent weeks which, combined with the start of the roll-out of vaccines, should give a lift to the region’s economic recovery. However, there is likely to be …
17th December 2020
Egypt: government keeps the belt tight Egypt’s budget deficit has narrowed this year despite the COVID-19 pandemic as the authorities maintained a tight grip on public spending. While this highlights the commitment to lowering the public debt ratio, it …
10th December 2020
Deal or no deal? The past week has been dominated by the OPEC+ meeting and, while it has brought to the fore divisions within the cartel, it seems that the group is moving towards some sort of agreement. The OPEC Conference started on Monday but, having …
3rd December 2020
UAE: major oil discovery, OPEC quit rumours This week’s revelation by the UAE that it has discovered major new oil reserves boosts the economy’s long-term prospects but it may further raise questions over its commitment to OPEC. On Sunday, Abu Dhabi …
26th November 2020
Aramco’s bond issuance: a cause for concern? This week’s dollar bond sale by Saudi Aramco is a further sign that the government is squeezing every last drop out of the company in order to contain the size of this year’s budget deficit, but adds to …
19th November 2020
What does a vaccine mean for MENA? The distribution of an effective COVID-19 vaccine would clearly improve the near-term outlook but scarring effects from the crisis mean that we still expect the region to recover more slowly than most other parts of the …
12th November 2020
The US election and implications for MENA This week’s US election has yet to reach a conclusive result but it looks increasingly likely that Joe Biden will secure the presidency. Even so, some of the potential downside risks facing the Middle East and …
5th November 2020
Saudi budget data: austerity doing its job Data published this week showed that, even though it’s early days, fiscal austerity in Saudi Arabia is already having the desired effect of improving the underlying budget position. But this will come at the …
29th October 2020
Oman’s issuance to help unlock financing? Oman successfully returned to the international bond market this week, which will help finance the large twin deficits and support the rial’s dollar peg. Ultimately, though, we think Oman will have to rely on …
22nd October 2020
More Saudi bank mergers in the pipeline? The merger of two of Saudi Arabia’s largest banks may be a sign of things to come as firms in the sector look to boost profitability against the backdrop weak economic growth and low interest rates. National …
15th October 2020
Egypt: low inflation to elicit IMF call for rate cuts Egypt’s September inflation reading will be closely watched next week as there is a good chance that it will prompt the IMF to give the central bank the green light for further interest rate cuts. A …
8th October 2020
Saudi budget plans suggest austerity is here to stay Saudi Arabia’s preliminary 2021 budget that was released this week reinforces our view that, with oil prices likely to stay low, policymakers are not intending to row back on recent fiscal austerity. …
1st October 2020
Saudi: low oil prices limit scope for policy support Saudi policymakers are apparently “assessing all the options” in a bid to boost the Kingdom’s economic recovery but, with oil prices still low, the scope to row back on fiscal austerity plans is …
24th September 2020
OPEC meets as clouds gather over the oil market The OPEC ministerial meeting that takes place today is unlikely to result in any immediate policy changes, but the cartel will probably acknowledge the worsening demand outlook and may signal that it stands …
17th September 2020
Gulf financing sources widen amid low oil prices The fall in the price of Brent crude oil this week has put further pressure on fiscal positions across the Gulf, with most likely to run large budget deficits over the second half of the year. At the time …
10th September 2020
Lebanon and Tunisia not out of the woods yet Developments in Tunisia and Lebanon this week have raised hopes that policymakers will soon tackle their respective economic problems, but there are still plenty of reasons to remain cautious. Tunisia’s new …
3rd September 2020
Lebanon in limbo as crisis deepens Nearly three weeks after the Lebanese government resigned following the Beirut blast there has still been no progress in forming a new one as the country falls further into the depths of its crisis. Former Prime Minister …
27th August 2020
Oman’s government reshuffle A government reshuffle in Oman this week saw Sultan Haitham relinquish some of his powers. Changes at the foreign ministry may help to improve relations with other Gulf countries and pave the way for Oman to secure bilateral …
20th August 2020
Lebanon’s investors should ready for larger losses The resignation of Lebanon’s government is unlikely to result in the political change that protestors are demanding and, with debt restructuring negotiations on hold, bondholders will probably have to …
13th August 2020
Beirut blasts to deepen Lebanon’s crises The catastrophic blast in port of Beirut on Tuesday has led to widespread destruction in the city and a significant loss of life. The disaster will, sadly, only deepen Lebanon’s economic, humanitarian, and …
6th August 2020
Pressure mounting on Dubai’s GREs The past week has highlighted the strains that the coronavirus crisis has inflicted on some of Dubai’s government-related entities (GREs) and reinforced our concerns over their ability to service large debts. Reports this …
30th July 2020
Health fears bring leadership changes onto agenda The health of the leaders of Saudi Arabia and Kuwait has come into the spotlight this week and, while we think that a leadership transition wouldn’t alter the economic outlook for Kuwait, it would heighten …
23rd July 2020
Policy paralysis returns to Tunisia Tunisian Prime Minister Elyes Fakhfakh resigned on Wednesday after a week of political turmoil, which will hold up efforts to secure a new IMF deal and increases the threat of a sovereign debt crisis. Mr. Fakhfakh’s …
16th July 2020
Reasons to be cautious about Diriyah Gate Construction started on a new tourist development in Saudi Arabia in recent weeks but the plan risks repeating past mistakes with other megaprojects and diverting resources away from other key areas Diriyah Gate …
9th July 2020
Dubai’s recovery to be sluggish Figures released this week showed that Dubai’s economy shrunk by 3.5% y/y in Q1 due to the start of the coronavirus crisis. Of course, Q1 figures are old news and only covered the first month of lockdown (in March). More …
2nd July 2020
Banking sector risks rising in the UAE The UAE’s banking sector is continuing to show signs of vulnerability and reports over the past week have echoed our concerns. (See here .) Moody’s downgraded eight of the UAE’s largest banks, including Emirates NBD, …
25th June 2020
Lebanon’s “disasterclass” Comments from Hezbollah leader, Hassan Nasrallah, have raised concerns that the Lebanese authorities may back away from IMF talks, further increasing the risk that Lebanon’s crisis deepens. The Lebanese authorities had hoped for …
18th June 2020
Egypt: IMF deal strengthens case for rate cuts News over the past week that Egypt has secured an IMF deal and that headline inflation remains subdued should give the central bank room to resume its easing cycle later this month. Egypt’s new one-year …
11th June 2020
Saudi, FX reserves, PIF and Newcastle United The sharp decline in Saudi Arabia’s foreign exchange reserves in recent months is more benign than it appears. But with the sovereign wealth fund holding an increasing share of the Kingdom’s FX savings, it will …
4th June 2020
Easing lockdowns will lead to only slow recoveries As Eid al-Fitr celebrations across the Middle East and North Africa draw to a close, a number of countries have started to outline their paths out of stringent coronavirus lockdowns. Dubai, where some …
28th May 2020
Dubai’s economic hit brings bailout on to agenda The past week has provided clear signs of the toll that the coronavirus crisis is taking on Dubai’s economy and negotiations are apparently underway for Abu Dhabi to ride to the rescue. As we’ve noted …
21st May 2020