Middle East ETF News Older than One Year
IMF-Managing Fiscal Risks in the Middle East and North Africa
June 11, 2023--Summary:
Countries in the Middle East and North Africa are exposed to significant fiscal risks. This paper analyzes the sources of these fiscal risks in 17 low- and middle-income countries in the Middle East, North Africa and Pakistan region, excluding high-income Gulf countries (MENAPEG), and discusses avenues for reform to strengthen fiscal risk management.
The materialization of fiscal risks in MENAPEG has been driven by macroeconomic shocks, contingent liabilities, and tail-risk events. The region has a track record of volatile economic growth and sharp exchange rate movements. High dependence on hydrocarbon revenue among MENAPEG oil and gas exporters and pervasive universal subsidies generate considerable budgetary exposure to swings in commodity prices. Substantial government involvement in the economy and large state ownership of firms and banks exposes several MENAPEG countries to contingent liabilities from state-owned enterprises and the financial sector. Lastly, the region's history of social unrest and conflicts together with tail-risk events such as the recent COVID-19 pandemic, and natural disasters and climate change, have been important sources of fiscal risks.
Many of the factors historically associated with the materialization of fiscal risks in MENAPEG countries are likely to remain sources of vulnerability in the future, raising the need for robust fiscal risk management frameworks. Policy reform can strengthen fiscal risk management in MENAPEG. This paper describes precedents where progress is made and provides a broad analytical framework for policymakers to build upon to fully embrace fiscal risk management in all its dimensions. Going forward, it is crucial for national authorities to enhance their capacity to identify, quantify, and assess risk factors and their budget's exposure to them. This should be followed by thorough fiscal risk analysis to inform policy decisions to mitigate risks. Where risks cannot be mitigated or are judged to be acceptable, countries should consider adopting appropriate medium-term fiscal frameworks to build buffers to deal with them.
Source: imf.org
GCC Economic Growth Expected to Slow to 2.5% in 2023
May 17, 2023--Non-communicable diseases pose a growing threat to public health and economic performance in the GCC, new World Bank report says
The economies of the Gulf Cooperation Council (GCC) are projected to grow at a slower pace in 2023 compared to the previous year, in the face of lower oil and gas earnings and a global economic slowdown, according to the new World Bank Gulf Economic Update (GEU).
The GCC is expected to grow by 2.5% in 2023 and 3.2% in 2024. This compares to the region's remarkable GDP growth of 7.3% in 2022, which was fueled by a strong increase in oil production for most of that year.
The weaker performance is driven primarily by lower hydrocarbon GDP, which is expected to contract by 1.3% in 2023 after the OPEC+ April 2023 production cut announcement and the global economic slowdown.
Source: worldbank.org
MENA economies to expand at a slower pace in 2023-IMF
April 14, 2023--For GCC oil exporters higher prices will offset impact of lower growth
Growth in the Middle East and North Africa (MENA) economies is projected to slow to 3.1% this year, from 5.3% last year, according to the IMF.
"Despite the series of global shocks, the MENA region surprised on the upside last year. We estimate that real GDP grew by 5.3%, reflecting strong domestic demand and a rebound in oil production," said Jihad Azour, director of the IMF's Middle East and Central Asia Department, at a briefing at IMF-World Bank Spring Meetings on Thursday.
Source: IMF.org
Growth Slows for Most MENA Economies Amid Double-Digit Food Inflation
April 6, 2023-Rising food prices will have an impact on future generations
Economies in the Middle East and North Africa (MENA) are expected to grow at a slower pace in 2023, as double-digit food inflation adds pressure on poorer households and the impact of food insecurity can span generations, according to the World Bank's latest economic update.
Titled "Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa," the report forecasts MENA's GDP will slow to 3.0% in 2023, from 5.8% in 2022. Oil exporters, who benefited from a windfall in 2022, will experience slower growth, but a large gap remains between high-income countries and the rest of the region. Real GDP per capita growth, a better proxy for living standards, is expected to slow down to 1.6% in 2023 from 4.4% in 2022.
Inflation in the region rose dramatically in 2022, especially in countries that experienced currency depreciations.
Source: worldbank.org
Gulf economies to slow this year on sluggish oil demand
January 24, 2023--Overall growth in the six GCC economies was forecast to average 3.3% and 2.8% this year and next respectively, the Jan. 9-23 poll showed, down from 4.2% and 3.3% in the previous poll.
Economies in the six-member Gulf Cooperation Council (GCC) will grow this year at half the rate of 2022 as oil revenues take a hit from an expected mild global slowdown, according to the median view from a Reuters poll of economists.
Crude oil prices, a major driver for Gulf economies, are down more than a third from last year's highs and were expected to remain under pressure this year over fears of a recession in major economies sapping demand.
Source: Zawya.com
World Bank-Weak Governance in MENA Region Worsens Deepening Land Crisis
January 18, 2023--New World Bank Report Calls for Holistic Land Policy Reforms
Weak governance exacerbates the deepening land crisis in the Middle East and North Africa region, according to a new World Bank report that urges broad reforms to improve land use and access amid increasing stress from climate change and population growth.
Titled "Land Matters: Can Better Governance and Management of Scarcity Prevent a Looming Crisis in the Middle East and North Africa?", the report shows how continuing land deterioration in a region that is 84 percent desert worsens water scarcity issues that threaten food security and economic development.
Source: worldbank.org
As Commodity Prices Surge Again, MENA Countries Can Draw Lessons from the Past
Commodity exporters are benefiting from a marked improvement in their terms of trade, while commodity importers are feeling the pain of higher imported energy and food prices. A key question is how countries are managing this boom relative to past experience, particularly as the current commodity price shock is occurring in a global and regional context that is distinct from previous episodes.
Our latest Regional Economic Outlook examines how MENA countries are responding to high commodity prices and protecting the vulnerable. This task is much harder for commodity importers, where fiscal space is limited. In contrast, the challenge for commodity exporters is to leverage the surplus from high energy prices to build buffers against future shocks and make progress with their transition and diversification plans.
Source: imf.org
Gulf Countries Should Maintain Reform Momentum, Despite Oil Boom
Surging commodity prices have limited the spillovers from the war in Ukraine and the impact from tighter global financial conditions, and have allowed for a more positive outlook for GCC economies.
Throughout its history, the GCC region has experienced distinct periods of rising oil revenues. During those periods, countries deepened their dependency on oil and gas, increased wages and hirings in the public sector, expanded social safety nets, and ramped up capital expenditure. During 2002-08 and 2010-14 for example, the public sector wage bill increased by 51 and 40 percent respectively.
Source: IMF.org
Mideast Stocks: Major stock markets extend losses as oil falls
Crude prices-a key catalyst for the region's financial markets- dropped as rising COVID-19 cases in China sparked fears of lower fuel consumption from the world's top crude oil importer and after OPEC cut its 2022 global demand forecast.
Source: Zawya.com
GCC retail sector overall will see 15.7% YoY growth in 2022-Alpen Capital
Mega events including the World Cup, the return of tourism and population growth are among factors cited in the return to growth, with Duty Free Sales at airports also expected to grow by 65.5% year-on-year to reach $2.2 billion in 2022 and further projected to reach $3.0 billion by 2026, implying a compound annual growth rate (CAGR) of 8.4%.
Source: zawya.com
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December 7, 2022--Policymakers have been more restrained in their response to surging commodity prices this time around
The current commodity price boom is affecting the region's commodity exporters and importers differently.
November 29, 2022--Additional revenues from higher energy prices could help the region achieve long-term prosperity by maintaining the recent reform momentum
GDP growth for Gulf Cooperation Council (GCC) countries-Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE-is expected to more than double, reaching 6.5 percent in 2022, according to our recent Policy Paper.
November 15, 2022--Saudi Arabia's benchmark index fell 0.6%
Major Gulf stock markets fell in early trade on Tuesday, extending losses from the previous session as oil prices slid.
November 15, 2022--Duty free sales are also soaring in the GCC in 2022
The GCC retail industry will surpass pre-pandemic levels in 2022 as it returns to steady growth after a period of disruption, with 36% year-on-year growth expected for FIFA World Cup 2022 host Qatar.
