MENA Quarterly: Q3 2022

A round-up of our key articles on the MENA region in Q3 2022

The outlook for the Middle East and North Africa region is mixed halfway through 2022. The hydrocarbon exporters of the GCC are set to see some of the strongest growth in years as oil and gas production is ramped up amidst an ongoing recovery in global demand from the pandemic crisis, while high oil prices will help balance the books following several years of lower revenues. The outlook for non-oil sector growth in the GCC is more challenging as inflation accelerates and bites into household incomes, but PMI survey readings have remained robust so far and the oil windfall will enable governments to offer support as necessary.  The outperformer will be Qatar, where preparations for the FIFA World Cup in November has driven the PMI survey to record highs, while Kuwait’s non-oil growth will lag amidst ongoing political stalemate.

In contrast, non-GCC MENA countries are expected to see slower growth with parliamentary impasses impeding legislation in Iraq, Lebanon and Tunisia. This will exacerbate some of the mounting challenges to the outlook for the region this year, especially for oil importers. The high energy and food prices driven by the war in Ukraine, along with a strong dollar and tightening global monetary policy all pose problems for MENA oil importing countries, and while the recovery from the pandemic will keep GDP growth positive, the outlook has deteriorated as tourism struggles and households see their earnings eroded by high inflation.

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