Middle East ETF News Older than One Year
As Commodity Prices Surge Again, MENA Countries Can Draw Lessons from the Past
December 7, 2022--Policymakers have been more restrained in their response to surging commodity prices this time around
The current commodity price boom is affecting the region's commodity exporters and importers differently.
Commodity exporters are benefiting from a marked improvement in their terms of trade, while commodity importers are feeling the pain of higher imported energy and food prices. A key question is how countries are managing this boom relative to past experience, particularly as the current commodity price shock is occurring in a global and regional context that is distinct from previous episodes.
Our latest Regional Economic Outlook examines how MENA countries are responding to high commodity prices and protecting the vulnerable. This task is much harder for commodity importers, where fiscal space is limited. In contrast, the challenge for commodity exporters is to leverage the surplus from high energy prices to build buffers against future shocks and make progress with their transition and diversification plans.
Source: imf.org
Gulf Countries Should Maintain Reform Momentum, Despite Oil Boom
November 29, 2022--Additional revenues from higher energy prices could help the region achieve long-term prosperity by maintaining the recent reform momentum
GDP growth for Gulf Cooperation Council (GCC) countries-Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE-is expected to more than double, reaching 6.5 percent in 2022, according to our recent Policy Paper.
Surging commodity prices have limited the spillovers from the war in Ukraine and the impact from tighter global financial conditions, and have allowed for a more positive outlook for GCC economies.
Throughout its history, the GCC region has experienced distinct periods of rising oil revenues. During those periods, countries deepened their dependency on oil and gas, increased wages and hirings in the public sector, expanded social safety nets, and ramped up capital expenditure. During 2002-08 and 2010-14 for example, the public sector wage bill increased by 51 and 40 percent respectively.
Source: IMF.org
Mideast Stocks: Major stock markets extend losses as oil falls
November 15, 2022--Saudi Arabia's benchmark index fell 0.6%
Major Gulf stock markets fell in early trade on Tuesday, extending losses from the previous session as oil prices slid.
Crude prices-a key catalyst for the region's financial markets- dropped as rising COVID-19 cases in China sparked fears of lower fuel consumption from the world's top crude oil importer and after OPEC cut its 2022 global demand forecast.
Source: Zawya.com
GCC retail sector overall will see 15.7% YoY growth in 2022-Alpen Capital
November 15, 2022--Duty free sales are also soaring in the GCC in 2022
The GCC retail industry will surpass pre-pandemic levels in 2022 as it returns to steady growth after a period of disruption, with 36% year-on-year growth expected for FIFA World Cup 2022 host Qatar.
Mega events including the World Cup, the return of tourism and population growth are among factors cited in the return to growth, with Duty Free Sales at airports also expected to grow by 65.5% year-on-year to reach $2.2 billion in 2022 and further projected to reach $3.0 billion by 2026, implying a compound annual growth rate (CAGR) of 8.4%.
Source: zawya.com
GCC Economies Expected to Expand by 6.9% in 2022
October 31, 2022--Investing in green growth could help GCC GDP grow to over US$ 13 trillion by 2050
The economies of the Gulf Cooperation Council (GCC) are projected to expand by 6.9 %in 2022 before moderating to 3.7% and 2.4% in 2023 and 2024, according to the new World Bank Gulf Economic Update (GEU).
Easing of pandemic restrictions, and positive developments in the hydrocarbon market drove strong recoveries in 2021 and 2022 across the GCC. Strong economic recovery and supply chain bottlenecks raised inflation in the GCC to an average rate of 2.1% in 2021- up from 0.8% in 2020.
view the World Bank-Gulf Economic Update Green Growth Opportunities in the GCC
Source: Worldbank.org
IMF-Regional Economic Outlook: Middle East and Central Asia: Mounting Challenges, Decisive Times
October 31, 2022--Summary:
In a worsening global environment, economies in the Middle East and Central Asia are being buffeted by a confluence of shocks: a global slowdown, high and volatile food and energy prices, faster and stronger than expected tightening of financial conditions, and the risk of fragmentation.
The region's emerging market and middle-income economies (EM&MIs) and low-income countries (LICs) are hit hard, with many facing curtailed access to market financing, while oil-exporting countries are being buffered by still-high energy prices.
The adverse impact of Russia's war in Ukraine on the Caucasus and Central Asia (CCA) has thus far been milder than expected. Still, the CCA's strong ties to Russia entail substantial risks to the region's outlook. The most urgent policy challenge for all countries is to tackle the cost-of-living crisis by restoring price stability, protecting vulnerable groups through targeted support, and ensuring food security. Policy trade-offs in EM&MIs and LICs have become more pronounced than ever, as they also need to preserve debt sustainability and financial stability. Oil exporters have the opportunity to maximize the benefits of the oil windfall by building buffers and advancing their diversification plans. CCA countries should carefully assess the magnitude and durability of the initial spillovers from the war in Ukraine and adjust their policy mix accordingly. Limited policy space in many countries raises the urgency of structural reforms to bolster economic growth while transforming economies to become more resilient, sustainable, diversified, and inclusive.
Source: imf.org
GCC economies set to grow at 6.5% this year
October 20, 2022--Economies in the Gulf Cooperation Council (GCC) are set to grow by 6.5% in 2022 making them one of the strongest performing regions of the world this year, and delivering their strongest growth in at least a decade, HSBC said in a new report.
The annual HSBC Economist Roadshow, which is in the Middle East, said for 2023 the growth forecast for GCC is 5%. In Bahrain, GDP growth of 4.3% is forecast for 2022 and 2.8% in 2023.
Source: zawya.com
Promoting Inclusive Growth in the Middle East and North Africa: Challenges and Opportunities in a Post-Pandemic World
October 11, 2022-Summary:
Despite some pre-pandemic gains in poverty reduction, literacy, and lifespans, many economies in the Middle East and North Africa (MENA) have struggled to ensure that the benefits of economic development and diversification accrue equitably to all segments of their populations.
Among the main issues that remain unresolved are the high share of inactive youth (who are not engaged in employment, education, or training); large gaps in economic opportunities for women; fragmented social protection systems; and underdeveloped private sectors with tight regulation, absence of a level playing field, and limited access to credit that stifle the creation of new firms and growth, employment, and incomes.
The COVID-19 pandemic not only risks wiping out some of the progress made in the region over the past decades, but could also exacerbate inequality in a durable way. There is evidence that the impact of the pandemic has been uneven across groups, with the recession having a disproportionate effect on the low-skilled, the young, women, and migrant workers in employment and incomes. With widespread inequality, high unemployment, and the expected entry of 27 million young people into the labor force over the next 10 years, countries across the MENA region need to evolve their economic models to boost job creation and make sure that the benefits of economic development are shared more widely among all their citizens. This book's objective is to reassess the inclusive growth agenda in the MENA region in light of the rapidly changing pandemic-influenced world. It argues that countries need to embrace global trade and technological advances and evolving demographics at home as an opportunity to successfully implement policies that foster higher and more inclusive growth. It underscores that a return to the old social contract is neither desirable nor feasible. The book presents a comprehensive view of policies suited to the regional context that would boost job-rich and inclusive growth within a resilient macroeconomic policy framework. Its goal is to provide guidance to policymakers in the region to frame how best to promote inclusive growth, including in their engagement with all stakeholders.
Source: imf.org
MENA Economies Grow by 5.5% But Benefits are Uneven
October 5, 2022--Energy, food inflation, higher global interest rates add stress for oil importers
The economies of the Middle East and North Africa (MENA) region are expected to grow by 5.5% this year-the fastest rate since 2016-followed by a slowing of growth to 3.5% in 2023.
Yet this growth is uneven across the region, as countries, still struggling to overcome the lasting effects of the COVID-19 pandemic, face jolting new shocks from higher oil and food prices brought on by the war in Ukraine, rising global interest rates, and slowdowns in the United States, China, and the Euro area.
The World Bank's latest economic update, titled "A New State of Mind: Greater Transparency and Accountability in the Middle East and North Africa," finds that the region's oil exporting countries are benefitting from high hydrocarbon prices, but oil importing nations confront different circumstances. Oil importers face heightened stress and risk from higher import bills, especially for food and energy, and tightening fiscal space as they spend more on price subsidies to cushion the pain of price rises on their populations.
Source: worldbank.org
Inflation-at-Risk in in the Middle East, North Africa, and Central Asia
September 2, 2022--Summary:
This paper investigates inflation risks for 12 Middle East and Central Asia countries, with an equal share of commodities exporters and importers. The empirical strategy leverages the recent developments in the estimation of macroeconomic risks and uses a semi-parametric approach that balances well flexibility and robustness for density projections.
The paper uncovers interesting features of inflation dynamics in the region, including the role of backward versus forward-looking drivers, non-linearities, and heterogeneous and delayed exchange rate pass-through. The results have important implications for the conduct of monetary policy and central bank communication in the Middle East and Central Asia and emerging markets in general.
Source: IMF.org
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