Entries for 'Middle East North Africa'

Positive developments in recent months, most notably the Ras El-Hekma, deal bode well for Egypt. The macroeconomic ramifications of these developments should help boost growth, reduce inflation, put public debt on a downward sustainable path, and improve the external position.

This note summaries the main topics discussed during our online investor trip to Egypt. Overall, participants’ outlook on the Egyptian economy was broadly positive, with many citing the massive liquidity injection stemming from the Ras El-Hekma deal has the main upside development.

After bottoming out over the past two years, the momentum of nonresident capital flows to emerging markets has shifted. This in large part due to a better EM outlook relative to advanced economies, with average EM output growth likely to be higher and EM interest rate spreads likely to widen.

Saudi Arabia's short-term macroeconomic outlook remains favorable, despite tighter global financial conditions. We expect non-oil growth to remain robust at 5%, driven by consumption and investment. The current account will continue to narrow, while capital outflows will outweigh capital inflows.

The historic Ras El-Hekma deal will bring in $35bn of immediate financing within the next couple of months. The cash windfall will help cover Egypt’s external financing needs over the foreseeable future and, combined with an expanded IMF program, can boost gross reserves to over $50bn.

In this report we highlight the potential fallout to the global economy of a wider, prolonged, war in the Middle East. We focus on two scenarios, and see how each scenario affects commodity prices, trade disruption, and global inflation and growth.

The ongoing conflict in Gaza will widen the current account deficit. Gross financing needs will remain very high and available financing will be insufficient unless an IMF program resumes which would usher in additional official financing.

Gross foreign assets of the GCC countries are forecasted to grow to $4.4 trillion by the end of 2024, in this note we analyze where these petrodollars are being invested.

We analyze the impact of a potential spike in oil prices on advanced and developing countries, as well as the global economy as whole. We find that the overall effect is much less severe than in previous oil shocks due to structural changes including the reduction in the intensity use of oil.

This report analyzes the possible political, social, and economic implications of the Israel-Hamas war on the MENA region.

CCA growth continues to surprise, driven by strong domestic demand and inflows from Russian migrants. The dynamics seen since the invasion of Ukraine are forecasted to continue benefitting the region in 2024, however risks remain tilted to the downside.

We look at the expected impact of the recent earthquake on Morocco's economy. In the long-term, boosts from the planned reconstruction may offset the initial negative impact, as the Moroccan government seizes the opportunity to curb pre-existing technological disparities in the affected regions.

We look into the issue of exchange rate misalignment in Egypt. We find that the current real effective exchange rate is overvalued by around 10%. The results support our view that Egypt's currency must be allowed to float, and that this must also be accompanied by tighter structural policies.

Capital inflows are set to rebound in 2023 as sovereigns, particularly Saudi Arabia, issue more debt to finance fiscal deficits. However, resident outflows, largely GCC transfers to sovereign wealth funds, will continue to far exceed nonresident inflows.

This note is the third installment of our series of reports focusing on Egypt. We look at the composition of privatization proceeds in FY 2022/23 and then analyze potential prospects for privatization in FY 2023/24.

We continue our series of reports focusing on Egypt by analyzing the fiscal outlook for the next fiscal year.

This note kicks off a series of reports focusing on Egypt, which we plan to release over the coming months. Today’s note will discuss Egypt’s external financing picture for FY23 and FY24.