MENA Economic Outlook

Growth in the Middle East and North Africa (MENA) region has been slowing, as Gulf oil producers slashed output to tighten crude markets and monetary policy rates rose. With interest rates largely mirroring the US Fed in the six GCC economies, private sector borrowing costs have risen considerably and tempered growth. Despite this, GCC non-oil activity remained relatively healthy thanks to robust government spending and investment.

Trusted Insights for What's Ahead^®

• Economic growth slows across the MENA region With the fight against inflation requiring tighter monetary policy than previously expected, economies across the region appear to be slowing.
• Robust GCC non-oil growth driven by UAE and Saudi Arabia Non-oil growth in the Gulf remains relatively solid, but may be starting to slow as higher-rates-for-longer take their toll on activity. Nonetheless, non-oil growth remains relatively strong on investment spending and confidence.
• Fiscal positions across the Gulf are set to improve on higher oil prices Fiscal surpluses, which came under some pressure in the Gulf on softer prices in H1 2023, will be improving in the second half on a rebound in oil prices.
• Outside the Gulf, economies remain under pressure Tighter global monetary conditions and a slower world economy continues to put pressure on external accounts of the non-oil economies in the region. In these countries, fiscal restraint and structural reforms remain critical.