MENA

The Middle East and North Africa (MENA) department provides in-depth macroeconomic analysis on 15 MENA countries, including Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Libya, Qatar, Lebanon, Morocco, Oman, Saudi Arabia, Tunisia, and the UAE. Most Research Notes on these countries are typically the result of country visits and contain a review of economic trends; an analysis of macroeconomic policies; assessment of political stability; and a detailed database and near-term economic forecast. In addition, we publish two regional (the GCC and MENA) reports. Through its annual Economic Forum and CEO meetings, the department also maintains close contact and exchanges ideas on an ongoing basis with the leading economists and CEOs of member firms in the MENA region. The country work in the MENA department is also integrated with the IIF’s two flagship reports: the Global Economic Monitor and Capital Flows to Emerging Markets.

Sub-Saharan Africa

The Sub-Saharan section of the Africa-Middle East department provides comprehensive, forward-looking analysis on the major economies in the region, including South Africa, Nigeria, Kenya, Ghana, Tanzania, Cote d’Ivoire and Zambia. In-depth economic reports that are framed within the political and social context of each country cover topics such as the short- and medium-term outlook for growth, inflation and the balance of payments; the factors that drive capital flows and exchange rate movements; an assessment of monetary, fiscal and structural policies and how this affects financial stability; and analysis of key risks. Reports and analysis are grounded in comprehensive databases that provide forecasts for all the key macroeconomic variables over a 2-year time horizon. Most of the Research Notes are based on regular visits to the countries and are the result of discussions with government officials, private sector participants and think tanks.

In addition to individual Country Research Notes, the department produces an annual Regional Report that provides cross-country analysis and looks at topical themes and issues in the region. The department also provides regular input to some of the IIF’s flagship reports, such as the Global Economic Monitor and Capital Flows to Emerging Markets. The work of the department is showcased at the annual IIF Africa Financial Summit, which attracts senior bankers and high-level public officials from the region, including Central Bank Governors and Ministers of Finance, as well as executives from global firms with an interest in Africa.

Documents & Resources

Publication
May 19, 2015

The decision to publish regulations governing direct ownership of shares listed on the stockmarket, Tadawul, by Qualified Foreign Financial Institutions marks an important step to open the Saudi economy to foreign equity investors. A growing allocation to Saudi stocks by global investors could translate to significant inflows within a few years if the country is eventually included in major benchmarks such as the MSCI emerging market index. Allowing ownership of shares by QFIs is intended to reduce market volatility, increase efficiency and transparency, and, ultimately, support economic growth.

Publication
May 13, 2015

Uncertainty shrouding the copper mining industry has now been addressed. After negotiations earlier this year, the government modified its proposed changes to the mining tax regime that were introduced in the 2015 budget, concerned that the industry was not paying sufficient taxes and much-needed revenue for infrastructure investment was being foregone. The compromise, which has helped stabilize the foreign exchange market and reduced the likelihood of mine closures and job losses, should pave the way for renewed investment and higher output going forward and push the current account back into surplus by 2016. The main economic risk is the price of copper, which we assume will recover gradually this year.

Publication
May 12, 2015

The UAE is in a relatively strong position to withstand low oil prices. Ample public foreign assets will mitigate the adverse impact. Growth is expected to edge down slightly, reflecting a slowdown in public spending. As financial conditions tighten this year in the U.S., the policy rate in the UAE will rise in line with the U.S. Fed, but with some lag.

Publication
May 7, 2015

*Behind the bond market selloff
*Oil—too much too soon?
*Global Growth—not yet much better in Q2
*Indonesia—looking for a rebound
*Brazil—no pain no gain
*Saudi Stock Market Opens to Foreigners

Publication
April 29, 2015

Lebanon’s economic performance has been lackluster, reflecting policy inaction amid a protracted political crisis as well as the impact of rising regional insecurity. The economy may benefit from the recent sharp fall in oil prices, but the extent of economic recovery will be contingent on further improvement in the security situation. Prices in the country declined in the past few months partly due to one-off factors. A significant decline in the public debt ratio will take strong fiscal and structural reforms to reduce the deficit and create conditions for higher and sustainable growth.

Publication
April 28, 2015
After 16 years in power, the People’s Democratic Party lost the presidency to the opposition All Progressives Congress in March’s delayed elections. Voter dissatisfaction with a lack of security, endemic corruption, widespread poverty, inadequate infrastructure and harsher economic conditions all played a part. However, the new government will be hard pressed to meet its election promises as the collapse in oil prices will act as a major constraint on its ambitious economic development plans. The challenge will be to accelerate the pace of reforms in order to unlock Nigeria’s full economic potential.
Publication
April 22, 2015

2015 has not started as well as hoped. Activity data have disappointed in Q1 and business confidence has deteriorated. The IIF again revised down its global forecast and now projects growth of 2.8%, unchanged from 2014. We still peg 2015 as a year of divergence, but the rotations implied by these divergences, such as a pick-up in growth in oil importing countries, are materializing only slowly. Looking ahead, momentum should increase during the course of the year and into 2016, when annual growth should rise to 3.3%. However, risks remain tilted to the downside.

Publication
April 16, 2015

* Global equity rally pauses after record highs
* China—Slow Growth Will Require Further Easing
* Iran—The Dawn of a New Economic Era?
* Global bank lending snapshot: Slowdown in bank lending in emerging markets, modest growth in mature markets

Publication
April 15, 2015

The economic implications for Iran of reintegration into the global economy would be enormous. Growth could accelerate to 6% in fiscal years 2016/17 and 2017/18 driven by a surge in exports and private investment, the fiscal deficit would narrow, the large spread between the official and the black market rates could be eliminated, and the authorities could press ahead with reforms to improve the business environment. The agreement could restore Iran’s oil production and exports before mid-2017, adding to pressure for continued low oil prices beyond 2015.

Publication
April 6, 2015

Nonoil growth will remain strong in 2015, underpinned by the new fiscal stimulus. In the absence of tighter fiscal policy or flexibility in the exchange rate regime, the external and fiscal accounts are expected to swing to large deficits, but these will be easily financed given ample financial buffers. Monetary conditions are expected to gradually tighten in line with U.S. rate hikes in the context of the peg to the dollar. In addition to geopolitical uncertainties, the principal economic risk is a prolonged period of low energy prices.

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