aman union conference · 2013-12-04 · aman union conference middle east and north africa ......

Aman Union Conference

Middle East and North AfricaMacroeconomic Outlook

Ed ward Coughlan – Head of Middle East AnalysisBusiness Monitor International

Presentation Agenda

I. BMI Methodology

II. Outlook for the GCC

III. Outlook for North Africa

IV. Focus on ‘Crisis’ States

V. Q&A

Presentation Agenda

I. BMI Methodology




I. Q&A

Who We Are

• Established in 1984

• We are a leading source of market intelligence encompassing macroeconomic, political risk, financial markets and industry research worldwide

• Emerging and frontier markets specialists

• Headquartered in London, with regional offices in Singapore, Johannesburg and New York

• Over 120 research analysts worldwide

Methodology

Methodology

Country Risk Methodology

MACROECONOMIC FORECASTING

• Our forecasting methodology is based on ‘Total Analysis’: the integration of multiple variables including macro indicators, political risk, financial markets and sectors outlooks

• We use publicly available data sources, prioritising national level sources

• We have an econometric model (OEF) but we use this more for benchmarking as opposed to defining our forecasts

• Indeed, we believe in ‘analyst intervention’, taking cues from markets, politics and global/regional and micro trends

FINANCIAL MARKETS FORECASTING

• As with everything, our FM methodology reflects ‘Total Analysis’, integrating our macro, political risk and sectors research

• We also integrate fundamental with technical analysis

POLITICAL RISK ANALYSIS• Analysts produce comprehensive domestic political outlooks, supported by Head of Region and

Head of Political Risk

Presentation Agenda

I. BMI Methodology




V. Q&A

Middle East & North Africa

Gulf: Public spending to remain elevated as governments seek to placate potential domestic opposition.

Growth Rates To Converge Across Region: Lower oil prices and base effects will see similar growth rates across MENA.

MENA Macroeconomic Outlook: Positive outlook in most states, though partly due to base effects. Political & security issues to limit growth in much of Middle East. Favourable demographics and increased government spending to boost private consumption.

Little Hope For 'Crisis States': We do not expect a resolution to crises in Syria and Iran. Similarly, Yemen and Libya will remain very unstable both politically and economically.

North Africa: Inflation to head broadly lower on the back of cheaper food imports in H213.

Key Risk – Subsidies: North African governments require subsidy reform to meet IMF demands and reduce budget deficits.


GCC – Real Growth Rates (%)

Remain positive on GCC outlook

Growth will slow and converge

Non-oil sector to drive growth

Kuwait to lag


GCC - Fiscal Account, % of GDP

Lower oil prices will worsen fiscal outlook

Less room for fiscal expansion

Qatar and Kuwait best placed


Incremental Oil Production (‘000 bbl)Limited growth in exports

Saudi to remain key swing producer

Libya and Iraq to record highest growth rates

Substantial risks of outages


GCC House Price Inflation % chg y-o-y

Housing to act as principal source of inflation

Tightening supply, no delivery of new housing

Divergence in UAE – Dubai to outperform Abu Dhabi


Reliance On Hydrocarbon Revenues, 2012

Diversification to become ever more important

Saudi Arabia best placed for industrial base

Kuwait could be left behind


GCC Ratings

Kuwait’s uncompetitivenessa major concern

Localisation policies to worsen business environment

Substantial impact on remittances


I. BMI Methodology




V. Q&A


Real GDP Growth, % chg y-o-y

Libya to enjoy fastest growth rates

Worst is over for Egypt

Political risks to remain elevated


MENA – Budget Deficits, % of GDP

Subsidy reform vital

Political motives to outweigh economic imperatives

Lower oil prices would alleviate some pressures


I. BMI Methodology




V. Q&A


BMI’s Proprietary Political Risk Ratings


Dubai Exports


Q&A

aman union conference · 2013-12-04 · aman union conference middle east and north africa ......

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