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

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

April 13, 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.

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.

April 2, 2015

*Dollar, U.S. equities falter; record-high interest rate volatility
*Which emerging markets would suffer from a global risk shock?
*China—supporting the housing market
*Japan—the elusive inflation target
*Nigeria—from the bullet to the ballot box

March 19, 2015

The 2015 budget stepped away from the previous countercyclical fiscal approach and introduced measures to address the structural deficit and stabilize the government debt-to-GDP ratio. Personal income tax rates were raised for the first time in the post-Apartheid era, the expenditure ceiling was lowered, and headcount was frozen for the next two years. Successful consolidation will depend on the government’s ability to hold the line in upcoming wage negotiations with the public sector unions. Although the tighter fiscal stance should take some pressure off the Reserve Bank, we still expect monetary policy to be tightened later this year.

March 19, 2015

* Markets price in a slower pace of U.S. rate hikes
* Fed drops “patience” but projects less tightening
* UK budget—frontloading the pain
* IIF Spring Meeting in Doha—the quick read

March 16, 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.

March 14, 2015

We expect average growth in the MENA region to pick up slightly from 2.8% in 2014 to 3.2% this year, driven by the recoveries in Egypt, Morocco, and Iran. For the MENA oil exporters, the aggregated current account surplus will shrink from about $300 billion in 2014 to $25 billion in 2015, and the fiscal position will shift from a large surplus to a significant deficit. Nevertheless, ample public foreign assets and low debt in most oil exporters in the region will mitigate the adverse impact of low oil prices on economic activity and allow public spending to continue growing, albeit at a slower pace than in recent years. The low oil prices may encourage acceleration and deepening of structural efforts to improve energy efficiency and diversify their economies.

March 14, 2015

As the top LNG exporter and the eighth largest exporter of petroleum related liquids in the world, the collapse in oil and gas prices will have a material negative impact on external and fiscal surpluses. However, growth is expected to be largely shielded by the country’s plans to maintain fiscal expenditures and continue with projects, reflecting preparations to host the FIFA World Cup in 2022. The risk of a sustained period of low energy prices is mitigated by the country’s large net external assets.

March 5, 2015

The sharp drop in oil prices since mid-2014 implies a sharp drop in capital outflows from oil exporters, including reserve accumulation. While in absolute terms the reduction in these “petrodollar” investments is expected to be greatest for flows into advanced economy government bonds, the impact on these large liquid markets is likely to be small relative to other factors such as shifts in central bank QE and cyclical developments. The most significant impact is likely to be felt in neighboring countries of major oil exporters.