Aman Union Conference · 2013-12-04 · Aman Union Conference Middle East and North Africa ......
Transcript of 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
II. Outlook for the GCC
III. Outlook for North Africa
IV. Focus on ‘Crisis’ States
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
II. Outlook for the GCC
III. Outlook for North Africa
IV. Focus on ‘Crisis’ States
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.
Middle East & North Africa
GCC – Real Growth Rates (%)
Remain positive on GCC outlook
Growth will slow and converge
Non-oil sector to drive growth
Kuwait to lag
Middle East & North Africa
GCC - Fiscal Account, % of GDP
Lower oil prices will worsen fiscal outlook
Less room for fiscal expansion
Qatar and Kuwait best placed
Middle East & North Africa
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
Middle East & North Africa
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
Middle East & North Africa
Reliance On Hydrocarbon Revenues, 2012
Diversification to become ever more important
Saudi Arabia best placed for industrial base
Kuwait could be left behind
Middle East & North Africa
GCC Ratings
Kuwait’s uncompetitivenessa major concern
Localisation policies to worsen business environment
Substantial impact on remittances
Middle East & North Africa
I. BMI Methodology
II. Outlook for the GCC
III. Outlook for North Africa
IV. Focus on ‘Crisis’ States
V. Q&A
Middle East & North Africa
Real GDP Growth, % chg y-o-y
Libya to enjoy fastest growth rates
Worst is over for Egypt
Political risks to remain elevated
Middle East & North Africa
MENA – Budget Deficits, % of GDP
Subsidy reform vital
Political motives to outweigh economic imperatives
Lower oil prices would alleviate some pressures
Middle East & North Africa
I. BMI Methodology
II. Outlook for the GCC
III. Outlook for North Africa
IV. Focus on ‘Crisis’ States
V. Q&A
Middle East & North Africa
BMI’s Proprietary Political Risk Ratings
Middle East & North Africa
Dubai Exports
Middle East & North Africa
Q&A