Saudi, UAE and Egypt to drive MENA economic growth in 2019: Fitch

The GCC – and particularly Saudi Arabia and the UAE – will be the main contributor to rising headline growth, alongside Egypt in the Middle East and North Africa (MENA) in 2019, according to the latest report by Fitch Solutions Macro Research.

“We forecast MENA economic growth to decelerate slightly from 2.1 percent in 2018 to 1.9 percent in 2019. The latter figure marks a downward revision from our previous forecast of 2.3 percent, prompted primarily by the OPEC and non-OPEC oil producers’ December decision to remove 1.2 million barrels per day (mbd) off the market,” the report said.

That said, the report highlighted that its anticipated slowdown in regional growth is much less pronounced than the global average, which is forecasted at 3 percent in 2019, down from an estimated 3.4 percent in 2018.

Noting that a sharp economic contraction in Iran will act as the biggest drag on regional growth in 2019, Fitch Solutions forecasted Saudi growth to inch up from an estimated 2.3 percent in 2018 to 2.4 percent in 2019, adding, “as the government steps up non-oil sector investment and maintains generous cost-of-living and public sector employee allowances, while holding off on major fiscal consolidation measures.”

“This will likely encourage private investment and business activity and provide tailwinds to consumption. We note that Saudi point-of-sale (POS) transactions and consumer loan growth have trended upwards in recent months, indicating improving consumer confidence,” the report concluded.