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
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

Publication
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.

Publication
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.

Publication
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.

Publication
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.

Publication
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.

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

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