MENA | Saudi Q1 GDP, Qatar lockdown exit, Egypt inflation
Saudi GDP fell 3.3% y/y in Q1 according to flash estimates, slightly weaker than we had expected. The decline was driven by oil output cuts, while non-oil activity expanded by 3.3%, recovering pandemic losses. Amid growing
optimism about the recovery, this will lead to an upward revision to our 2021
non-oil GDP forecast from the current 2.4%.
What you will learn from this report:
- Qatar has announced its roadmap out of lockdown, set to start on 28 May, after an encouraging drop in daily Covid-19 infections.
- Egypt’s inflation slowed to 4.1% in April, defying expectations of a rise and broader EM and global trends. Given high exposure to global food price movements, lower inflation is unlikely to prompt further interest rate cuts even as economic recovery is yet to gain traction.
- Quarantine-free travel is now also open between Bahrain and the UAE, which will support confidence and business conditions in both countries, while Kuwait plans to gradually reopen its economy, starting with the lifting of its curfew today.
Big shifts are underway in Russia-China trade
Data for Q3 on the volume of China's imports of crude from Russia show a drop against the June level. Rather than an indication that China's demand has peaked, this may be a sign that China is preparing for the Russian oil price cap recently agreed by G7 by shifting some of its purchases to the grey market.Find Out More
Levelling up is unlikely under the Liz Truss government
The government's levelling up ambition has probably been made more, not less, difficult by the new "Plan for Growth". Policies of lower taxes, less regulation, and a smaller state are unlikely to have much beneficial impact on long-term growth at the national level, let alone in those regions with long track records of underperformance.Find Out More