Related Fitch Ratings Content: Fitch Ratings 2022 Outlook: Middle East and North Africa Sovereigns
Fitch Ratings-Hong Kong: Oil exporting sovereigns in the Middle East and North Africa (MENA) will register significantly stronger growth in 2022, Fitch Ratings says, as the OPEC+ taper drives large increases in oil output except in Bahrain and Qatar where oil production will remain stable. High vaccination rates in the Gulf Cooperation Council (GCC) have driven gradual easing of economic restrictions in 2021, which will underpin non-oil real GDP growth of about 3%.
Elsewhere in MENA, we expect mostly marginal improvements in growth, following partial recoveries from the pandemic in 2020. We factor in a gradual recovery in tourism, which directly accounts for 5%-10% of GDP across MENA's non-oil economies (with the exception of Israel). Fiscal space is limited across non-GCC countries to help drive stronger growth, following the increase in debt in 2020.
In 2021, the number of Negative Outlooks started to decline after the pandemic-related increase in 2020. The number of downgrades also dropped, after spiking in 2020. Three of the 15 MENA sovereigns that Fitch rates are on Negative Outlook - Kuwait, Oman, and Tunisia - reflecting the pandemic's lingering hit to public and external finances and growth, and liquidity and funding uncertainties in Kuwait and Tunisia.
Our outlook is supported by reform momentum to varying degrees across the region and more constructive regional political dynamics that have emerged in 2021. Nonetheless, the region continues to face significant economic and political challenges and remains vulnerable to a fresh oil price shock. Structural problems, such as weak growth, high youth unemployment and poor governance, continue to pose risks to political stability and fiscal consolidation. Gulf states face reform dilemmas as they seek to achieve long-term fiscal sustainability, while also delivering good economic outcomes for citizens and promoting economic diversification.
'Fitch Ratings 2022 Outlook: Middle East and North Africa Sovereigns' is available at fitchratings.com or via the link above.
-Ends-
Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@thefitchgroup.com
Additional information is available on www.fitchratings.com
© Press Release 2021
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
