Economic Snapshot for MENA
January 12, 2021
The MENA economy should rebound this year. Oil exporters should gain from higher crude prices and the reduction of OPEC+ cuts, while countries across the region should gain from some progress in the vaccine rollout and stronger demand abroad. That said, geopolitical tensions, fragile fiscal positions and uncertainty around the course of the pandemic pose downside risks.
MENA Countries Monetary & Financial Sector News
Regional inflation jumped to 12.6% in November from 11.6% in October, amid rising price pressures in Egypt and Iran. This year, regional inflation is set to ease somewhat, as depreciation-fueled price pressures in Iran and Lebanon lessen, and the impact of the VAT hike in Saudi Arabia fades. However, many countries will see stronger price pressures on rebounding activity.
Most central banks in the region manage currency pegs and thus lack independent monetary policies. Among those with independent policies, the central banks of Egypt, Israel and Tunisia stayed put in meetings held recently. This year, monetary policy stances will likely remain ultra-accommodative.
The Israeli shekel appreciated notably against the USD over the last month, while the Egyptian pound lost ground. 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. In December, Iraq devalued its currency to facilitate the payment of public salaries.
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Middle East & North Africa Economic News
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Israel: Inflation returns in March
April 14, 2021
Consumer prices rose 0.60% from the previous month in March, accelerating from February's 0.30% rise.
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Saudi Arabia: Oil prices dip in early April
April 9, 2021
Oil prices fell in recent weeks, as OPEC+ agreed to ease its production cuts starting from the month of May.
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Egypt: Inflation steady in March
April 9, 2021
Consumer prices rose 0.62% from the previous month in March, accelerating from February's 0.15% increase.
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United Arab Emirates: Consumer prices record joint-smallest fall since March 2020 in January
April 6, 2021
Consumer prices increased 0.15% in January over the previous month, accelerating from the 0.09% rise seen in December.
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United Arab Emirates: PMI increases to 20-month high in March
April 5, 2021
The IHS Markit Purchasing Managers’ Index (PMI) increased to its highest value since July 2019 in March, clocking in at 52.6, up from February’s 50.6.
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