MENA BUSINESS OUTLOOK A region in transition 1 MENA BUSINESS OUTLOOK - PowerPoint PPT Presentation

MENA BUSINESS OUTLOOK A region in transition 1 MENA BUSINESS OUTLOOK

GLOBAL TRENDS Geopolitical Economic Interest Rate Convergence 1. Global terrorism 1. Global Growth 2. US-JCPOA 2. US interest rates 3. US 3. Dollar fluctuations Global Growth is Improving Source: Goldman Sachs, 2018-global-economic- Source: Goldman Sachs, Source: Goldman Sachs, outlook 2018-global-economic- 2018-global-economic- outlook outlook 2 MENA BUSINESS OUTLOOK

OIL TRENDS Rising Oil prices Government Finances 80 70 60 50 40 30 20 10 0 Last… Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Source: IMF WTI Brent Source: EIA 3 MENA BUSINESS OUTLOOK

MENA TRENDS MENA GDP Growth 2017-2020 MENA GDP Growth 2017 vs 2018 5 6 5 4.5 4 4 3 3.5 2 3 1 2.5 0 2 a y E t a a n n n o r n n t i p a i i i e 2017 2018 2019 i o a c A a a a r b a s t y d k r w e n c m i a U a r g r I n o g h a r Q u r u O E o u l A a b r K A T J o T B e MENA GDP growth . M Source: IMF -1 L S 2006 - 2016 growth average World Average -2 4 MENA BUSINESS OUTLOOK

MENA TRENDS MENA Inflation 2015-2020 MENA Inflation 2017 vs 2018 9 25 8 20 7 6 15 5 10 4 3 5 2 0 o n n n r E a a n t a y n t 1 i a p e c i a o i i a a i a A a b s r t y k c d m w e r n a r U i a I g n r o h r g a Q u r u o O E u r b l a A K T o J A T B e M i L d u 0 -5 a S 2015 2016 2017 2018 2019 Source: IMF Source: IMF MENA 2006-2016 World average MENA 2017 2018 5 MENA BUSINESS OUTLOOK

KSA TRENDS KSA 2018 Outlook 6 70 5 60 4 50 3 40 GDP Inflation Brent 2 30 1 20 0 10 2015 2016 2017 2018 -1 0 Source: IMF 6 MENA BUSINESS OUTLOOK

KSA TRENDS KSA Business Activity KSA Non-oil Growth 60 5 58 4 56 54 3 2.7 52 50 Jan-16 Feb-16 Mar-16 Jun-16 Jul-16 Jan-17 Feb-17 Mar-17 Jun-17 Jul-17 Apr-16 May-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Apr-17 May-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 2 1.6 48 46 1 0.59 0.57 0.5 44 0.25 -0.58 42 0 6 6 6 6 7 7 7 1 1 1 1 1 1 1 40 0 0 0 0 0 0 0 2 2 2 2 2 2 2 - - - - - - - KSA 1 2 3 4 1 2 3 Q Q Q Q Q Q Q -1 Source: Markit Source: Central Department of Statistics & Information 7 MENA BUSINESS OUTLOOK

KSA TRENDS KSA: Consumer confidence Tourist Arrivals (millions ) 106 19 18.2 17.9 18 104 17 102 16.3 15.7 16 100 15 98 14.1 14 96 13 94 12 92 10.8 11 90 10 88 2010 2011 2012 2013 2014 2015 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Source: Nielsen Source: SESRIC 8 MENA BUSINESS OUTLOOK

UAE ECONOMY Business Activity As we leave 2017… 60 1. Increase in input costs 58 56 2. Decline in output prices d 54 3. UAE growth relative to GCC 52 50 ... and look forward to 2018 48 46 1. Stronger public sector spending 44 2. Government revenue diversification May-16 Jul-16 Nov-16 May-17 Jul-17 Nov-17 Jan-16 Mar-16 Sep-16 Jan-17 Mar-17 Sep-17 3. Pick up in credit growth Dubai Economy Tracker UAE Source: Emirates NBD Research 9 MENA BUSINESS OUTLOOK

UAE TOURISM Total contribution of travel and tourism to the economy Source of consumption? Source: World Travel & Tourism Council, Travel & Tourism Economic Impact 2017, United Arab Emirates 10 MENA BUSINESS OUTLOOK

GCC TRENDS GDP Per Capita 2017 ($USD) 140000 120000 100000 80000 60000 40000 20000 0 … … n a o a h a q n n n i E a n t a y n t r p d i a y a i i t y i a a e i c a o a A a r r s a u y u t n t e c d b e r r k m w n a r U s i g a o I I n r e g o r i g h a Q L u i E u O S o S K k u i r l b a K N A T o J a T e B M P L Source: IMF 11 MENA BUSINESS OUTLOOK

GCC TRENDS GCC Growth 2017 vs 2018 GCC Growth 2017 vs 2018 4 6 5 3.5 4 3 3 2.5 2 2 1 1.5 0 1 A n r E n t 4 a i i a 1 S A a a t 0 m w a K r U 2 h Q u O -1 - a K 4 B 0 0.5 0 2 e g -2 a r e 0 v A C 2015 2016 2017 2018 2019 C -3 G -0.5 2017 2018 GDP growth Private consumption Source: IMF Source: World Bank 12 MENA BUSINESS OUTLOOK

QATAR TRENDS Qatar Quarterly Growth 4 3.5 3 2.5 2.5 1.9 2 1.7 1.5 1 0.5 0.3 0 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Source: Qatar Statistics Authority 13 MENA BUSINESS OUTLOOK

OMAN TRENDS Oman GDP growth Oman Unemployment (%) 4.5 19 4 18.5 3.5 18 3 17.5 2.5 17 2 16.5 1.5 1 16 0.5 15.5 0 2015 2016 2017 2018 15 2014 2015 2016 2017 2018 -0.5 Source: Central Bank Oman Source: NCSI 14 MENA BUSINESS OUTLOOK

OMAN TOURISM Oman Inbound Tourism Oman Tourist Arrivals 450 400 350 300 250 200 150 100 50 0 GCC India UK Germany Pakistan Aug-17 Sep-17 Oct-17 Nov-17 Source: NCSI Source: NCSI 15 MENA BUSINESS OUTLOOK

EGYPT ECONOMY Societal challenges Weak government High inflation finances 16 MENA BUSINESS OUTLOOK

EGYPT ECONOMY Business Activity Unemployement (%) 52 12.8 50 12.6 48 12.4 46 12.2 44 12.0 11.8 42 11.6 40 11.4 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Source: Markit Source: CAPMAS, Egypt Inflation % (y-o-y increase) Foreign Exchange Reserves USD (in million) 32.95 35 37,020.00 40,000.00 28.1 30 35,000.00 21.9 25 30,000.00 20 25,000.00 15 20,000.00 10 Jul-2017 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Source: Central Bank of Egypt Source: Central Bank of Egypt 17 MENA BUSINESS OUTLOOK

EGYPT TOURISM Total contribution of travel and tourism to the economy Source of consumption? Source: World Travel & Tourism Council, Travel & Tourism Economic Impact 18 MENA BUSINESS OUTLOOK 2017, Egypt

KEY TAKEAWAYS 19 MENA BUSINESS OUTLOOK

STAY CONNECTED EMIR - Emerging Markets Intelligence & Research @EMIRresearch EMIR | Emerging Markets Intelligence & Research @EMIRresearch @SamirSM_EMIR @Trevor_EMIR @Gary_EMIR EMIR | Emerging Markets Intelligence & Research Samirsweida-metwally@emirintelligence.com Garymcfarlane@emirintelligence.com 20 MENA BUSINESS OUTLOOK

21 MENA BUSINESS OUTLOOK