MENA Quarterly Q2 2021

A round-up of our key articles on the MENA region and the latest forecasts                                                                      

Oil market outlook  OPEC+ has affirmed its plan to add 2m b/d of supply between May and July. The production additions will be distributed across all members and will also include Saudi Arabia unwinding its voluntary additional cuts of 1m b/d that it introduced for February to April.

GCC

Saudi Arabia There has been a marked shift towards boosting domestic investment in the kingdom in the face of lower than expected inward FDI over the last few years.

UAE PMI improves in March but global supply constraints are raising input costs.

Dubai  The Dubai property market performed well in Q1 2021, with residential rents largely up, and villa sales prices showing their first yearly increase since 2014 when oil prices fell.

Oman VAT and a higher oil price will have the budget deficit narrow this year.

Bahrain Bahrain’s economy contracted -5.8% in 2020 but we expect a modest recovery this year, and a narrowing of the fiscal deficit.   

Qatar The second wave of the coronavirus appears to have peaked, and the PMI survey points to growth in Q1 2021.

Non-GCC MENA

Egypt With the private sector still under pressure, especially with regards tourism, the planned ramp-up in government investment will likely be a key determinant of real GDP growth in Egypt this year.

Iraq The pandemic-driven oil price slump of the past 12 months, combined with OPEC+ mandated productions curbs as the bloc has tried to put a floor under prices, has exposed the long-existent underlying vulnerabilities in the Iraqi economy.

Jordan We hold to our expectation that the Jordanian economy will return to growth this year, but we have adjusted our projections downward owing to persistent challenges both domestically and internationally which will likely exert a drag on output through the first half at least. 

Lebanon With no end in sight to Lebanon’s multiple crises, and an ongoing deterioration in many indicators, we have revised our real GDP growth outlook for 2021 from a weak expansion to another sizeable economic contraction at -4.7% – albeit far less than the -27.3% we estimate for 2020. 

Morocco An initially sluggish pace of Covid-19 vaccinations in Europe will weigh on the Moroccan economy this year as tourism will take longer to recover than we anticipated at the start of the year.

Tunisia We have revised down our growth projections for Tunisia as the Covid-19 pandemic continues to weigh on both the domestic and the global economies. 

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