Middle East ETF News Older than One Year
Saudi Arabia's GDP growth set to slow to 2.4% this year due to lower oil production
June 27, 2023--However, non-oil growth will remain robust at 4.7%, says IIF
Saudi Arabia's overall GDP growth is expected to slow from 8.9% in 2022 to 2.4% in 2023, dragged down by an expected 3% decline in average oil production due to the impact of OPEC+ sponsored cuts to the kingdom's production targets, according to a report by the Institute of International Finance.
"However, we expect non-oil growth to remain robust at 4.7% in 2023," said Garbis Iradian, the IIF's chief economist for the MENA region.
The ongoing de-escalation of tensions in the region, following China's brokered rapprochement between Saudi Arabia and Iran, could encourage additional domestic and foreign investment, raising potential growth beyond the short term, he added.
Source: zawya.com
IMF-United Arab Emirates: 2022 Article IV Consultation-Press Release; and Staff Report
June 26, 2023--Summary:
Economic growth is strong, driven by non-hydrocarbon activity, timely support measures, and the benefits of earlier reforms. Inflation has risen with global trends, while high oil prices support large surpluses in the fiscal and external balances.
Banks are adequately capitalized overall, but nonperforming loans remain elevated, albeit down from recent peaks, and real estate prices have risen sharply in some segments. Long-term vulnerabilities from global decarbonization efforts are being addressed through commitments to climate initiatives and a balanced approach to energy transition.
Source: IMF
World Bank-MENA Macro Monitor
June 22, 2023--Exchange Rates and Central Bank FX Reserves.
Since the onset of the war in Ukraine, some MENA countries (especially the oil importers) have seen pressure on their exchange rates and FX reserves. Of the MENA countries without a pegged-like exchange rate regime, Lebanon, Egypt, Morocco, and Tunisia have
witnessed substantial declines in the value of their currencies vis-à-vis the dollar and the euro.
For Lebanon, the repercussions of the Ukraine war exacerbated an already dire situation, while, for Egypt, the large outflow of portfolio investments in the spring of 2022 was a main driver of the close to 50% deprecation of Egyptian pound against the dollar since January 2022. The Morocco dirham and Tunisian dinar, by contrast, track the euro more closely than the dollar, as the European Union is their main trading partner. Hence, despite depreciating by around 7% against the dollar since the start of the war in Ukraine, more than half of this change is due to the strengthening of the dollar vis-à-vis the euro, as the Morocco dirham and Tunisian dinar have depreciated by less than 3% compared to euro. For Tunisia, this is surprising given concerns over its ability to secure foreign financing, leading to downgrades by rating agencies to default or close-to-default status.
Source: worldbank.org
IMF Country Report-Israel: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Israel
June 15, 2023--Summary:
Following a remarkable recovery from the pandemic anchored in strong fundamentals, the outlook is for growth to slow broadly in line with potential, as inflation falls within the targeted range by end-2024.
However, the risk balance is tilted to the downside, reflecting, among other things, external risks and the continued uncertainty around the proposed judicial reform.
Source: imf.org
IMF-Managing Fiscal Risks in the Middle East and North Africa
June 11, 2023--Summary:
Countries in the Middle East and North Africa are exposed to significant fiscal risks. This paper analyzes the sources of these fiscal risks in 17 low- and middle-income countries in the Middle East, North Africa and Pakistan region, excluding high-income Gulf countries (MENAPEG), and discusses avenues for reform to strengthen fiscal risk management.
The materialization of fiscal risks in MENAPEG has been driven by macroeconomic shocks, contingent liabilities, and tail-risk events. The region has a track record of volatile economic growth and sharp exchange rate movements. High dependence on hydrocarbon revenue among MENAPEG oil and gas exporters and pervasive universal subsidies generate considerable budgetary exposure to swings in commodity prices. Substantial government involvement in the economy and large state ownership of firms and banks exposes several MENAPEG countries to contingent liabilities from state-owned enterprises and the financial sector. Lastly, the region's history of social unrest and conflicts together with tail-risk events such as the recent COVID-19 pandemic, and natural disasters and climate change, have been important sources of fiscal risks.
Many of the factors historically associated with the materialization of fiscal risks in MENAPEG countries are likely to remain sources of vulnerability in the future, raising the need for robust fiscal risk management frameworks. Policy reform can strengthen fiscal risk management in MENAPEG. This paper describes precedents where progress is made and provides a broad analytical framework for policymakers to build upon to fully embrace fiscal risk management in all its dimensions. Going forward, it is crucial for national authorities to enhance their capacity to identify, quantify, and assess risk factors and their budget's exposure to them. This should be followed by thorough fiscal risk analysis to inform policy decisions to mitigate risks. Where risks cannot be mitigated or are judged to be acceptable, countries should consider adopting appropriate medium-term fiscal frameworks to build buffers to deal with them.
Source: imf.org
GCC Economic Growth Expected to Slow to 2.5% in 2023
May 17, 2023--Non-communicable diseases pose a growing threat to public health and economic performance in the GCC, new World Bank report says
The economies of the Gulf Cooperation Council (GCC) are projected to grow at a slower pace in 2023 compared to the previous year, in the face of lower oil and gas earnings and a global economic slowdown, according to the new World Bank Gulf Economic Update (GEU).
The GCC is expected to grow by 2.5% in 2023 and 3.2% in 2024. This compares to the region's remarkable GDP growth of 7.3% in 2022, which was fueled by a strong increase in oil production for most of that year.
The weaker performance is driven primarily by lower hydrocarbon GDP, which is expected to contract by 1.3% in 2023 after the OPEC+ April 2023 production cut announcement and the global economic slowdown.
Source: worldbank.org
MENA economies to expand at a slower pace in 2023-IMF
April 14, 2023--For GCC oil exporters higher prices will offset impact of lower growth
Growth in the Middle East and North Africa (MENA) economies is projected to slow to 3.1% this year, from 5.3% last year, according to the IMF.
"Despite the series of global shocks, the MENA region surprised on the upside last year. We estimate that real GDP grew by 5.3%, reflecting strong domestic demand and a rebound in oil production," said Jihad Azour, director of the IMF's Middle East and Central Asia Department, at a briefing at IMF-World Bank Spring Meetings on Thursday.
Source: IMF.org
Growth Slows for Most MENA Economies Amid Double-Digit Food Inflation
April 6, 2023-Rising food prices will have an impact on future generations
Economies in the Middle East and North Africa (MENA) are expected to grow at a slower pace in 2023, as double-digit food inflation adds pressure on poorer households and the impact of food insecurity can span generations, according to the World Bank's latest economic update.
Titled "Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa," the report forecasts MENA's GDP will slow to 3.0% in 2023, from 5.8% in 2022. Oil exporters, who benefited from a windfall in 2022, will experience slower growth, but a large gap remains between high-income countries and the rest of the region. Real GDP per capita growth, a better proxy for living standards, is expected to slow down to 1.6% in 2023 from 4.4% in 2022.
Inflation in the region rose dramatically in 2022, especially in countries that experienced currency depreciations.
Source: worldbank.org
Gulf economies to slow this year on sluggish oil demand
January 24, 2023--Overall growth in the six GCC economies was forecast to average 3.3% and 2.8% this year and next respectively, the Jan. 9-23 poll showed, down from 4.2% and 3.3% in the previous poll.
Economies in the six-member Gulf Cooperation Council (GCC) will grow this year at half the rate of 2022 as oil revenues take a hit from an expected mild global slowdown, according to the median view from a Reuters poll of economists.
Crude oil prices, a major driver for Gulf economies, are down more than a third from last year's highs and were expected to remain under pressure this year over fears of a recession in major economies sapping demand.
Source: Zawya.com
World Bank-Weak Governance in MENA Region Worsens Deepening Land Crisis
January 18, 2023--New World Bank Report Calls for Holistic Land Policy Reforms
Weak governance exacerbates the deepening land crisis in the Middle East and North Africa region, according to a new World Bank report that urges broad reforms to improve land use and access amid increasing stress from climate change and population growth.
Titled "Land Matters: Can Better Governance and Management of Scarcity Prevent a Looming Crisis in the Middle East and North Africa?", the report shows how continuing land deterioration in a region that is 84 percent desert worsens water scarcity issues that threaten food security and economic development.
Source: worldbank.org
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