Monthly Insights: 15 January 2020

Published Date: 15 January 2020



The consensus view is that there will be a moderate improvement in the world economy in 2020, with both Bretton Woods institutions projecting an acceleration in global GDP growth. The IMF anticipates 3.4% in 2020, compared to an estimated 3.0% last year while the World Bank forecasts 2.5% compared to a 2019 estimate of 2.4%. 


Global macro: Despite the imminent signing of a ‘phase-one’ trade deal between the U.S. and China, 2020 has already shown us that risks are unlikely to go away. With global growth this year only likely to improve marginally, if at all, the world economy and financial markets can little afford persistent trade fears or geopolitical risks to interfere with  recoveries.   

GCC macro: OPEC’s decision at the end of last year to deepen oil production cuts in Q1 2020 will have a negative impact on the headline GDP growth of the GCC oil exporters this year.   

MENA macro: While on the face of it Egypt’s real GDP growth is strengthening, this belies the ongoing failure of the non-oil private sector to mount a lasting recovery. Government initiatives and lower interest rates should support this. 

Sub-Saharan Africa macro: A new deal struck between Ethiopia and the IMF in December could pave the way for greater opening up of the African economy, providing scope for increased cooperation between it and the UAE. 

Currencies: The dollar’s improvement so far in 2020 has been tentative  and while it has been across the board, it largely reflects weakness in two key currencies, the JPY and the GBP, which may not last. 

Equities: Notwithstanding a momentary spike in geopolitical tensions at the start of 2020, global equities showed enough signs which indicated continuance of exuberance from 2019. With key short-term risks behind us, the focus is likely to shift to market and economic fundamentals even as investors keep an eye on developments in a politics laden 2020. 

Commodities: Oil prices endured geopolitical risks to start the year even as the Middle East remains a criticial supplier of crude to international markets. 

Sector Report: Dubai’s tourism sector has seen growth in 2019 with international visitor numbers continuing to rise.

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