Economic Snapshot for MENA
March 11, 2020
Regional growth should recover slightly this year on a favourable base effect. However, economic activity will still be weak due to ongoing recession in Iran and the impact of the coronavirus. Downside risks include widespread geopolitical tensions, social unrest and political uncertainty in several countries, and a worsening of the viral outbreak.
MENA Monetary & Financial Sector News
Inflation in the Middle East and North Africa rose to 5.6% in January from 5.5% in December, due to higher price pressures in Lebanon and Saudi Arabia. This year, inflation is seen rising from its current level on resurfacing price pressures in GCC countries, although the recent notable fall in crude prices will cap price pressures.
Most MENA central banks manage currency pegs, against the USD or a basket of currencies including the USD or the EUR, and lack independent monetary policies. Several banks with currency pegs cut rates following the Fed’s surprise cut in early March. The central banks of Egypt and Israel, which have floating currencies, left their main policy rates unchanged.
The Egyptian pound strengthened against the USD in recent weeks on robust economic momentum, while the Israeli shekel depreciated slightly. Most remaining countries in the region maintain a de jure or de facto currency peg against the U.S. dollar or a basket of currencies mostly composed of the USD and/or the EUR.
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Middle East & North Africa Economic News
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Egypt: Inflation slows in February
March 10, 2020
Consumer prices were unchanged in February compared to the previous month, after rising 0.7% in January.
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Saudi Arabia: Coronavirus sparks a price war among OPEC+ members in March
March 6, 2020
Oil prices plunged over the past month, as markets continued to assess how the coronavirus outbreak was hitting the global economy and, in turn, oil demand.
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Egypt: Non-oil private sector remains mired in a downturn in February
March 3, 2020
Egypt’s Purchasing Managers’ Index (PMI), which measures business activity in the non-oil private sector, increased to 47.1 in February from 46.0 in January, indicating a less severe deterioration in business conditions—readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
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United Arab Emirates: Business conditions continue to deteriorate in February as PMI drops to an all-time low
March 3, 2020
The IHS Markit Purchasing Managers’ Index (PMI) inched down to 49.1 in February from 49.3 in January, marking the lowest reading since records began in August 2009.
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Saudi Arabia: Non-oil PMI posts weakest improvement since April 2018 in February
March 3, 2020
The Purchasing Managers’ Index (PMI), produced by IHS Markit, moderated to 52.5 in February from 54.9 in January.
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