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
January 29, 2015

Although Tanzania continues to enjoy strong economic growth, it still faces many developmental challenges. Things are changing, however, and the government is making a concerted effort to modernize the economy and improve policymaking. Central to its strategy is the rehabilitation and expansion of physical infrastructure, with the discovery of large reserves of offshore gas providing the potential to transform the economy further out. In the meantime, the government has to carefully manage the economy and put in place an institutional framework for the gas industry that satisfies all stakeholders.

Publication
January 23, 2015

Following a seamless succession in Saudi Arabia upon the death of King Abdullah yesterday morning, expect continuity in domestic and foreign policy. King Salman assumed power almost instantly and elevated Prince Muqrin to Crown Prince and appointed Prince Mohammad bin Nayef as Deputy Crown Prince and Deputy Prime Minister. Prince Mohammad remains in the powerful position of Minister of Interior. Prince Mohammad’s ascendancy ushers in a new era where for the first time since 1932, a grandson of the country’s founder King Abdul Aziz stands in line for succession as a future King.

Publication
January 16, 2015

As negotiations between Iran and the P5+1 resumed recently, the stakes for Iran’s economic future are high. Sanctions have inflicted heavy damage on Iran’s economy. In addition to the impact of the sanctions, Iran’s economy is suffering from the recent sharp fall in oil prices. Assuming no agreement, the Iranian economy would contract in the next two fiscal years and the fiscal deficit would widen to 5% of GDP. The harsh economic and social consequences of a failure to reach an agreement combined with the slump in oil prices would deepen Iran’s economic woes and could even threaten the current political order.

Publication
January 15, 2015

SNB abandons euro cap, U.S. forward rates slide
Tracking the oil boost for global consumers
New IIF Capital Flows Report projects continued weakness in flows to EMs in 2015
India—RBI makes its move
Saudi budget riding out the oil price collapse

Publication
January 14, 2015

South Africa has come through a difficult year that was blighted by extended industrial unrest at a time when the authorities were having to navigate through more volatile global financial markets. The worst may be over, however. A pickup in economic activity late last year bodes well for stronger growth in 2015, and the recent collapse in oil prices should lower the current account deficit going forward. Nevertheless, we still expect the Reserve Bank to tighten monetary policy and engineer a move back to positive real interest rates, possibly slightly ahead of the start of Fed normalization.

Publication
January 14, 2015

With a firm decision to defend oil market share at all costs and ample financial resources, the Saudi 2015 budget maintains high levels of spending in support of growth and employment. As a result, the fiscal balance is expected to swing to a deficit of about 11% of GDP. However, actual expenditures in 2014 seem to have far exceeded budgeted levels and set a record level of spending, suggesting likely modest consolidation in 2015. Fiscal cutbacks and weaker business sentiment due to the collapse in the price of oil are expected to dampen economic activity. Foreign asset accumulation sustained over the past decade will be interrupted, but asset levels will remain large.

Publication
December 23, 2014
This report examines recent market volatility and the consequences for the GCC economies from the sharp decline in oil prices. The countries in the region are much better positioned to cope with a slump in oil prices today than they were in the 1980s and 1990s. Ample public foreign assets and low debt will mitigate the adverse impact of low oil prices on economic activity and allow continued robust public spending, particularly on infrastructure. GCC currencies will remain resilient to pressures, further reinforcing the dollar peg.
Publication
December 9, 2014

The recent dramatic shift in the global oil market is taking its toll on Nigeria, the sixth largest net exporter of oil in the world. With the rise of shale oil supply in the U.S., Nigeria has already shifted its crude exports to Asia and Europe. However, the sharp drop in international oil prices is putting pressure on the naira and the country’s international reserves, forcing the authorities to tighten monetary and fiscal policy. As a result of these developments, growth is expected to slow slightly to about 6% in 2015. Nigeria has low public debt and can withstand oil prices at current levels for now, but pressing ahead with the reform agenda is now more urgent than ever.

Publication
December 4, 2014

Recent sanctions have inflicted heavy damage on Iran’s economy. A broad interim agreement could allow Iran to resume global trade and develop its huge energy resources, unleashing economic growth. Current low oil prices will put additional strains on Iran’s economy especially since Iran’s fiscal breakeven price of oil is $148 per barrel. These pressures could make a nuclear deal more likely by the June 2015 deadline. Without an agreement, the Iranian economy would likely weaken further and unemployment would continue to rise.

Publication
December 4, 2014

Markets focus on prospects for further ECB stimulus
Oil prices--another jump down
Stimulus in Europe—all hopes still on monetary policy
Manufacturing PMIs— uneven ride
Brazil goes orthodox
South Africa—hoping for better times ahead

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