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Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Gulf economies to slow on back of OPEC+ cuts One of the main angles to the surprise voluntary oil output cuts by OPEC+ is geopolitical – it’s another …
6th April 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Gulf non-oil sectors still leading the pack; Egypt price pressures starting to ease March’s batch of PMIs showed that activity in non-oil sectors …
4th April 2023
Note: We’ll be discussing the OPEC+ decision and answering your questions in an online briefing at 10:00 EDT/15:00 BST today . Register here . The surprise announcement of a further 1.66mn bpd cut to oil output by OPEC+ will reduce GDP growth mechanically …
3rd April 2023
Yesterday, OPEC+ members announced voluntary cuts to production from May until the end of the year. In total, the cuts amount to 1.16m bpd or about 1.1% of global supply, with Saudi Arabia accounting for the lion’s share of 0.5m bpd. At the same time, …
In the wake of the surprise move by OPEC+ to cut oil production, we held a special online briefing about the decision’s economic and market implications – as well as what this signals about global politics. Economists from across our Macro and Commodities …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . CBE delivers, but more tightening still needed The Central Bank of Egypt (CBE) announced that it raised interest rates by 200bp, taking the overnight …
30th March 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. …
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Overview – Growth across the Middle East and North Africa is set to slow sharply, and by more than most expect, in 2023. IMF deals will help to …
Recent turmoil in the banking sector may have been a US and European story, but there are potentially important angles for Emerging Market investors. Our latest EM Drop-In explored the economic spill-over risks from the recent panic and the …
28th March 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
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
While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
A key channel through which emerging markets could be affected by the strains in the global banking sector is if lending by foreign banks falls sharply. On this front, EMs’ vulnerabilities have eased since the Global Financial Crisis. But there are still …
16th 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 …
This report has been updated with additional analysis and a table and chart of key data. Inflation past its peak Saudi Arabia’s headline inflation rate slowed to 3.0% y/y in February on the back of an easing of both food and non-food inflation. We think …
15th March 2023
At the time of writing, financial markets appear to be stabilising after the turmoil caused by the collapse of SVB. And it doesn’t look like EMs have suffered large capital outflows or strains in their banking sectors. If this relatively benign scenario …
14th March 2023
The restoration of diplomatic ties between Saudi Arabia and Iran adds to signs that geopolitical tensions in the Middle East are easing, which may help to reduce risk premia in financial assets in the region as well as the oil market. Tensions will not …
13th 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
This webpage has been updated with additional analysis, Chart and Table of key figures. Inflation continues to soar, tightening cycle to resume Egypt’s headline inflation rate jumped to 31.9% y/y in February, leaving it just shy of an all-time high and …
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
Household spending in Saudi Arabia appeared to soften in the final months of 2022, but surveys suggest that consumers are optimistic about the outlook. The backdrop of loose fiscal policy, an improved labour market and falling inflation means that …
1st 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
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 …
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
This report has been updated with additional analysis and a Table and Chart of key data. Inflation edges higher to its peak Saudi Arabia’s headline inflation rate nudged up from 3.3% y/y in December to 3.4% y/y in January, which came on the back of a …
15th 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
This page has been updated with an additional chart and table of the key data. Inflation jumps to fastest pace since 2017 as food inflation hits record high Egypt’s headline inflation rate climbed from 21.3% y/y in December to 25.8% y/y in January, its …
Tunisia’s fragile balance of payments of position has deteriorated further over the past year and the dinar appears increasingly overvalued. We think that the currency needs to fall by at least 30% against the euro to restore competitiveness. The approval …
8th February 2023
The Central Bank of Egypt (CBE) surprisingly left interest rates unchanged at Thursday’s MPC meeting but, with inflation likely to rise even further above the central bank’s target, we still think that policy will be tightened further. We have pencilled …
3rd 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
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
This page has been updated with table and charts of key figures. Growth slow to round off a bumper 2022 The flash estimate for Saudi Arabia’s economy showed GDP expanded by a solid 1.5% q/q in Q4, but year-on-year growth continued to soften and we expect …
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
Saudi Arabia’s economy enjoyed bumper growth in 2022, but there were signs that activity was slowing in the final months of the year and we expect this trend to continue into the early part of 2023. Saudi Arabia’s economy was one of the best performers in …
25th 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
The recent falls in the Egyptian pound pose a threat to Egypt’s fragile public debt dynamics but we think that the government will be able to muddle through. The key risk is that the government shifts fiscal policy in a looser direction, which could …
18th 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 sharp fall in the Egyptian pound today means that, in real trade-weighted terms, it is at its lowest level since the 2016 devaluation. The experience from that period is that the boost to Egypt’s external competitiveness will lead to a sharp narrowing …
11th January 2023
This report has been updated with additional table and chart of key data. Inflation surges higher on back of weaker pound Egypt’s CPI inflation rate jumped from 18.7% y/y in November to 21.3% y/y in December, its fastest pace since the end of 2017. (See …
10th 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
The sharp fall in the Egyptian pound today, coming in the wake of last week’s move to ease FX restrictions, suggests that the authorities are starting to make good on their pledge to shift to a more flexible exchange rate regime. There are already signs …
4th January 2023
Gulf non-oil sectors lost steam at the end of 2022 December’s PMIs suggest that non-oil sectors across the Gulf lost some steam at the end of 2022, with the worsening global backdrop weighing particularly heavily on the UAE. Elsewhere, there were signs …
CBE acts aggressively to counter inflation surge and weaker pound The 300bp interest rate hike by the Egyptian Central Bank (CBE), which took the overnight deposit rate to 16.25%, suggests that policymakers are even more concerned about rising inflation …
22nd December 2022
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 …
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
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
This is part of a series of reports outlining our key macro and market calls for 2023. Click here to view the full series. Our latest EM Outlook can be found here . EMs will experience one of the broadest slowdowns in GDP growth in 2023 since the 1990s. …
This report has been updated with additional analysis, table and chart of key figures. Inflation on the way down Saudi inflation ticked down to 2.9% y/y in November on the back of a drop in food inflation. We think the headline rate will continue to fall …
Click here to read the full report. Overview – Growth across the Middle East and North Africa is set to slow sharply, and by more than most expect, next year. Oil output cuts will weigh on the Gulf even as fiscal policy stays loose. And while IMF deals …
13th 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