On course for weakest growth since the global financial crisis

The Middle East & North Africa region will struggle again next year, recording its weakest economic growth since the global financial crisis in 2009. Fiscal policy will have to be tightened in most places in order to rein in twin budget and current account deficits. Dollar pegs in the Gulf will remain in place but that means policymakers will be forced to follow the US Federal Reserve and hike interest rates. As a result, growth there is likely to stay subdued. Meanwhile, we expect Egypt’s economy to slow sharply, and by more than most expect, as inflation surges and policy is tightened. The upshot is that growth in the region as a whole is likely to weaken to just 1.5% in 2017.