Issue  No.80
27 June 2016

This report is designed to give you a snapshot about the MENA region tackling multiple issues:


        47.94  USD          1,326  USD


    Economic Outlook
  • Egypt's Suez Canal Authority has increased the tolls for very large crude carriers (VLCCs) coming from the Arabian Gulf and transiting the canal. The increase in tolls is part of a six-month experiment to increase fees for ships passing through the canal, and the new toll is 155,000 USD for VLCCs carrying more than 250,000 in deadweight tonnage.
  • Jordanian government has allocated 25 MM JOD to establish employment funds.  The aim of these funds is to give young Jordanians loans to start productive businesses.
  • The Lebanese labor ministry warned the international companies against the recent dismissals of big numbers of Lebanese employees without giving any reasons, and said that it will take necessary legal measures to protect the Lebanese workers. This trend was also persistent in many hotels, replacing Lebanese workers with foreigners, particularly Syrian workers.
  • The Omani Council of Ministers approved the Ministry of Tourism's 2040 plan to reform the tourism sector. The strategy aims to create more than half million jobs, and to invest 20 BN OMR in the sector, of which more than 80% come from the private sector.
  • Qatar is expected to experience a budget deficit over the next three years due to low oil and natural gas prices. The government is expecting a budget deficit of 7.8% of GDP this year, 7.9% of GDP in 2017, and 4.2% of GDP in 2018. It is worth mentioning that this year's budget deficit is the first for Qatar in 15 years.
  • In efforts to finance its budget deficit caused by low oil prices, Saudi Arabia government has been selling 20 BN SAR of domestic bonds to banks. The bonds will be of 5, 7, and 10 years of maturity and will be offered in fixed and floating rate tranches.
  • The GCC ministers of finance approved in principle the Value Added Tax (VAT) and Excise Tax treaties. These taxes are expected to be introduced in the GCC by January 1st 2017 for the Excise tax, and by January 1st 2018 for the VAT.
  • The trade deficit of Morocco increased by 7.7% in the first five months of 2016 compared to the same period last year. The deficit had reached 6.97 BN USD due to the increase in imports; for instance, wheat imports increased by 16.8% while equipment imports increased by 19.8% compared to last year.
  • In efforts to strengthen the private sector's role in driving economic growth and diversification, the government of Bahrain has activated 31 new laws to enhance regulatory frameworks and business environment.
  • Lawmakers in Kuwait are requesting the government to ban the appointment of expats in government jobs. This is in an attempt to reduce unemployment among citizens. Accordingly, the Civil Service Commission issued a decision banning expatriates from working in government jobs except in urgent need.
  • In efforts to attract more foreign investors and cut dependency on oil, Qatar plans to establish three economic zones that will allow foreign investors to acquire 100% overseas ownership. Qatar also plans to create an airport or sea port in the economic zones which will allow companies to transfer capital freely out of the country.
  • Commercial Bank of Dubai (CBD) is expected to take a 500 MM USD loan to be paid back over three years. Eight to ten banks will be providing the loan and it will be priced at 155 basis points above Libor. It has been notable recently that many Gulf banks are raising funds in order to finance their debts after the current drop in oil prices, and to borrow at low costs before the U.S. Federal Reserve raises interest rates again later this year. 
  • Saudi Arabia's new tax on unused lands will cause property prices to decrease by up to 40%. The new 2.5% annual tax on unused lands in the kingdom is expected to boost the market and reduce property prices back to normal levels.
  • Analysts expect gradual increase in consumer price inflation in Qatar over the next two years due to the introduction of new taxes, such as the Value Added Tax (VAT) in 2018. Consumer Price Inflation (CPI) is expected to increase from 2.7% to 3.4% over the next two years. It is worth mentioning that the government's removal of subsidies which has started late 2015 has been contributing to the increase in the prices of fuel, electricity, and water.
  • Annual consumer price inflation in Morocco increased to 1.9 % in May from 1.6 % in April, due to increase in food prices as the annual food inflation has increased to 3.6% this month from 2.9% in the previous month, while non-food price inflation did not change over the same period.
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