Download NBK Kuwait

GCC Economic
MENA
Economic
Outlook
January 2014
Solid growth in GCC as MENA ‘transition’ countries struggle
OPEC cuts output to keep oil prices close to $100
Egyptian growth improves, though fiscal challenges loom
MENA Economic Outlook - January 2014
MENA Economic Outlook
January 2014
Contents
MENA outlook
2
Bahrain
Macro and finance: Growth to remain modest
4
4
Kuwait
Macro forecasts: Better project activity in 2014
Money and finance: Signs of a pick-up in credit growth
6
6
8
Oman
Macro and finance: Non-oil investments to drive growth
10
10
Qatar
12
12
14
Macro forecasts: State spearheads non-oil investments
Money and finance: MSCI upgrade to boost fund inflows
Saudi Arabia
Macro forecasts: Private sector activity moderates
Money and finance: Lending growth eases, but still solid
16
16
18
UAE
20
20
22
Macro forecasts: Growth improves as confidence returns
Money and finance: Equity markets outperform
Egypt
Macro forecasts: Slow recovery seen in 2014
Money and finance: GCC support helps stabilize pound
Regional data and forecasts
NBK Economic Research
Abdullah Al-Ahmed Street, P.O. Box 95, Safat 13001
Kuwait City, Kuwait
Tel: +965 2259 5500 Fax: +965 2224 6973
www.nbk.com
24
24
26
28
MENA Economic Outlook - January 2014
MENA outlook
Solid growth in GCC as MENA ‘transition’ countries struggle; GCC to pay
greater attention to fiscal reforms…
and a potential rise in output from OPEC members
GCC forecast summary
% y/y
% y/y
%
% GDP
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
2014f
2015f
3.1
5.4
2.7
7.2
4.2
5.7
3.4
6.1
market fundamentals in 1H 2014. Key GCC OPEC
members – led by Saudi Arabia – are forecast to cut
oil output from current elevated levels early in 2014
in order to balance the market. (Chart 3.) Real oil
Ongoing challenges in countries undergoing
transition
–
including
Egypt,
Jordan,
Iran, Iraq and Libya are expected to loosen oil
Libya,
sector GDP is therefore seen declining 2% in 2014,
pushing overall GDP growth down to 3%.
Morocco, Syria, Tunisia and Yemen – will continue
to affect economic performance in the MENA
•
region. Although growth could rise to 4% in
pushed higher by a combination of solid growth
2014 from 3% in 2013, growth in most transition
and rising pressures on housing rents. But at around
countries will remain below par, averaging closer to
3% on a weighted basis, it is unlikely to concern
3%. While regional and international aid has helped
policymakers very much. (Chart 4.) Meanwhile,
to stabilize transition economies and reduce short-
the decline in oil revenues will reduce the GCC’s
term external funding pressures, better medium-
aggregate fiscal surplus to 7% of GDP, from 10% in
term prospects depend upon achieving the political
2013. (Chart 5.) Although this is still very strong by
consensus needed to bolster economic reforms and
international standards, we expect GCC countries
the return of foreign capital. For many countries,
to pay growing attention to the sustainability of
this still seems some way off.
their fiscal positions going forward. This could
Inflation across the GCC region could be
translate into slower growth in overall spending
•
In
the
resource-rich
GCC
region,
by
contrast, growth prospects remain favorable,
supported by high oil prices, a steady flow of
government development spending and – in some
than before, and tighter curbs on current spending
in particular. This, in turn, will have implications for
macroeconomic performance in the years ahead.
cases – an increasingly buoyant private sector.
•
Real GCC non-oil GDP growth is forecast at
MENA region – a combination of capital controls,
around 5.5% per year in 2014 and 2015, 0.5%
a managed depreciation of the pound and financial
points higher than in 2013. (Chart 1.) Qatar will
support from the GCC helped ease pressures on
remain the best performer, but the UAE economy
the external position in 2013. Along with a slight
– boosted by returning confidence and renewed
improvement in the political climate, this has set the
impetus from infrastructure investment – appears
stage for a modest acceleration in growth to 3% in
to be improving the quickest. (Chart 2.)
FY14/15. (Chart 6.) But major challenges remain.
•
We maintain our forecast for oil prices at
$100 per barrel (pb), on average, for 2014, a fall of
8% from 2013. Although oil prices held up well last
year, continued strong growth in non-OPEC supplies
2
In Egypt – a pivotal economy for the
As well as sustaining progress with the political
transition, the government must navigate the need
to protect living standards and social stability on the
one hand, and enact major deficit-reducing fiscal
reforms (particularly on subsidies) on the other.
MENA Economic Outlook - January 2014
MENA outlook charts
Chart 2. Real non-oil GDP by GCC country
Chart 1. GCC real GDP
(% y/y)
14
12
10
8
6
4
2
0
-2
-4
-6
-8
Oil
Non-oil
Total
NBK
f'cast
2002
2004
2006
2008
2010
2012
18.0
17.5
17.0
17.0
16.5
16.5
16.0
16.0
15.5
15.5
15.0
15.0
14.5
14.5
14.0
Jan-10
Jan-11
Jan-12
NBK
f'cast
20
15
10
10
5
5
0
0
-5
-5
2004
2006
2008
2010
6
4.5 4.5
4
2012
2014F
5.0
4.5 4.5
5.0 5.0
5.4 5.7
6
4
3.0 3.0
2
2
0
0
Bhn
Kwt
Oma
Qat
KSA
UAE
GCC
(% y/y, year average)
12
10
12
NBK
f'cast
8
10
8
6
6
4
4
2
2
0
0
2004
2006
2008
2010
2012
2014F
(% y/y)
8
8
NBK
f'cast
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
FY02/03
Source: Official sources / NBK estimates and forecasts
1
Includes condensate output in Oman and estimates for Bahrain
2
Includes NBK estimates of off-balance sheet revenues in the UAE and Oman
3
4.0
Chart 6. Egypt real GDP
15
2002
8
2
25
20
10
8
2002
(% GDP)
25
9.7
10
Jan-13
Chart 5. GCC budget balance
12
10.5
2015
Chart 4. GCC consumer price inflation
17.5
14.0
Jan-09
2014
1
(mn barrels per day)
(% y/y)
12
2014F
Chart 3. GCC crude oil output
18.0
14
12
10
8
6
4
2
0
-2
-4
-6
-8
0
FY05/06
FY08/09
FY11/12
FY14/15
MENA Economic Outlook - January 2014
Bahrain: macro and finance
Growth to remain modest; reform required to put budget on a more stable
long-term footing…
the existence of a budget deficit. While current
Bahrain forecast summary
% y/y
% y/y
%
% GDP
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
2014f
2015f
2.8
3.0
3.0
-5.0
2.6
3.0
3.0
-5.0
A strong recovery in oil production pushed
Bahrain’s economic growth to 4% in 2013,
following output disruptions in the previous
expenditures continue to rise, capital spending
is budgeted to decline, although various social
infrastructure projects should be financed offbudget through GCC grants. As oil prices soften
and revenues dip, Bahrain’s fiscal position is likely
to weaken further. The budget deficit is expected
to widen from an estimated 3% in 2013 to around
5% over the next two years. (Chart 9.)
year. (Chart 7.) This came despite a significant
•
slowdown in non-oil sector growth (from 7% to
relatively flat through 2013, averaging a modest
an estimated 3%), partly related to a base effect.
5% y/y in the first nine months. (Chart 10.) This is
The execution of large infrastructure projects –
significantly down from the 14% average recorded
funded by GCC peers – may provide some support
in the previous year. Growth in personal loans has
to non-oil sector growth over the medium-term.
been robust, picking-up to 15% y/y in September
However, this is expected to be offset by sluggish
2013, from 10% at the start of the year. But this
private sector activity, which continues to be
has been more than offset by a deceleration in
undermined by weak confidence levels. With oil
business loans, which make up around two-thirds of
output gradually stabilizing, we expect real GDP
total retail bank lending.
Private
sector
credit
growth
remained
growth to trend lower, averaging under 3% over
•
the next two years.
Bahrain’s banking sector continues to face
challenges. Commercial bank assets fell by some
•
Consumer price inflation edged higher in
5% y/y in September, dragged down by continued
2013, averaging 3.1% in the first ten months.
deleveraging in the wholesale banking segment.
Housing rents have been a large source of upward
Domestically-focused retail banks – who have fared
pressure on prices, with inflation in this segment
far better in recent years – saw growth in assets
climbing to as high as 11% y/y during 2013. The
slow from 13% y/y at the start of the year to just
government has progressed with several schemes
2%. Bahrain’s financial sector, the second largest
aimed at addressing the shortage of housing,
contributor to GDP, has yet to see a sustained
through
GCC
assistance
and
private
sector
involvement. Coupled with modest growth and
softer food prices, we expect inflation to remain
at a moderate rate of 3% over the forecast period.
recovery from the effects of the financial crisis and
subsequent social unrest.
•
A brief rally in the Bahrain stock market
(Chart 8.)
subsided in mid-2013, with the index remaining
•
Despite this, the index was still up by some 18% in
budget
relatively flat during the remainder of the year.
Additional expenditures for the 2013/2014
were
approved
in
June,
increasing
allocations for subsidies and pensions – despite
4
the year to November. (Chart 12.)
MENA Economic Outlook - January 2014
Bahrain: macro and finance charts
Chart 8. Consumer price inflation
Chart 7. Real GDP
(% y/y, year average)
(% y/y)
15
NBK
f'cast
10
15
4
10
3
5
5
0
0
-5
-5
Oil
Non-oil
Total
-10
-10
-15
-15
2002
2004
2006
2008
2010
2012
2
1
1
0
0
-1
-1
Chart 9. Budget balance
2004
2006
2008
2010
2012
2014F
Chart 10. Bank claims on private sector
(% GDP)
8
3
2
2002
2014F
4
NBK
f'cast
(% y/y)
8
60
60
6
50
50
4
4
40
40
2
2
30
30
0
0
20
20
-2
-2
10
10
-4
-4
0
NBK
f'cast
6
-6
-6
2002
2004
2006
2008
2010
2012
2014F
-10
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Chart 11. Policy interest rates
(%)
6
5
CBB one week deposit rate
4
3
3
2
2
1
1
0
Jan-07
0
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Source: Official sources / NBK estimates and forecasts
5
5
4
Jan-08
-10
Chart 12. Stock market indices
6
US Fed Funds target
0
260
260
240
240
220
200
Dow Jones Bahrain Index
220
200
180
180
160
160
140
140
120
120
100
100
80
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
80
MENA Economic Outlook - January 2014
Kuwait: macro forecasts
Non-oil growth solid despite sluggish project implementation; budget surplus
to decline, though remain huge...
weakens and non-OPEC supply continues to rise,
Kuwait forecast summary
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
% y/y
% y/y
%
% GDP
2014f
2015f
-0.6
4.5
3.0
20.0
3.1
4.5
3.5
19.0
High oil prices, large fiscal and trade
surpluses, and the government’s vast financial
reserves continue to provide a positive near-term
backdrop for the Kuwaiti economy. Although the
headline rate of economic growth will look weak in
2014, this is entirely driven by cuts in oil output;
non-oil growth, while far from firing on all cylinders,
is forecast to improve slightly to 4.5% thanks to
better project execution and continued strength
in the consumer sector. (Chart 13.) Both of these
factors could disappoint, however, resulting in
softer economic growth than forecast. We expect
gradual progress on much-needed economic reforms
to boost private investment levels and improve the
economy’s longer-term performance.
•
The consumer sector remains an important
we expect OPEC – including Kuwait – to cut output
significantly in 1H 2014 in order to balance the
market and keep prices close to $100 pb. Real
hydrocarbon GDP is seen falling by 4% in 2014
before registering a small rise in 2015.
•
Despite continued strength in the consumer
sector, inflation remained low through 2013,
averaging 2.7% in the first 10 months. (Chart
15.) This was in spite of a pick-up in housing
rent pressures, which were more or less offset by
decelerating inflation in the food segment. Inflation
in the remaining segments – sometimes thought
of as ‘core’ – reached just 0.7% y/y in August, its
lowest for years. Some upward drift in inflation is
seen in 2014, as core pressures rise and food price
inflation stabilizes. But inflation should remain in the
3-4% range over the next two years. (Chart 16.)
•
The budget is set to record another huge
surplus in FY2013/14, at 22% of GDP. (Chart
17.) This is slightly down from the 25% of GDP
recorded a year earlier. Oil revenues are expected
growth driver, but there are signs that growth
to dip slightly on softer oil prices while spending
may be softening a little. Consumer credit growth
posts a small rise of 4%. Comments from senior
has come off its peak (though remains strong),
government ministers in late 2013 about the need
employment growth has eased, and the impact
to control growth in subsidy payments suggest
of earlier increases in wages and benefits may be
that the government will maintain tighter control of
fading. Early figures also suggest that take-up of
spending in future, compared to the 15% average
debt relief under the Family Fund law implemented
annual increase seen over the past decade. So long
in 4Q 2013 has been much lower than the KD 0.8
as oil prices remain high, this will limit the decline
billion in loans applicable under the scheme. The
in the surplus going forward.
boost to disposable incomes and additional lending
will therefore be smaller than initially assumed.
•
A similar moderation is likely in Kuwait’s
giant current account surplus, due to a combination
•
Following a brief cut in 1Q 2013, crude oil
of peaking oil receipts and rising imports. But the
output rebounded to around 3.0 mbpd in mid-year,
surplus will remain above 30% of GDP. (Chart 18.)
close to its full capacity. (Chart 14.) As demand
6
MENA Economic Outlook - January 2014
Kuwait: macro forecast charts
Chart 14. Crude oil output
Chart 13. Real GDP
(% y/y)
25
Oil
20
Non-oil
(mn barrels per day)
25
Total
20
NBK
f'cast
15
15
10
10
5
5
0
0
-5
-5
-10
-10
-15
-15
2002
2004
2006
2008
2010
2012
2014f
3.1
3.0
2.9
2.8
2.7
2.6
2.5
2.4
2.3
2.2
2.1
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Chart 15. Consumer price inflation by sector
Chart 16. Consumer price inflation
(% y/y)
10
9
8
7
6
5
4
3
2
1
0
Jan-09
Food (18%)
Housing (27%)
Total CPI
Jan-10
Jan-11
Jan-12
10
9
8
7
6
5
4
3
2
1
0
6
NBK
f'cast
5
5
4
4
3
3
2
2
1
1
0
0
2002
2004
2006
2008
2010
2012
2014f
Chart 18. Current account balance
(% GDP, fiscal year)
35
NBK
f'cast
30
90
90
NBK f'cast
80
80
$ billions
70
70
% of GDP
25
25
20
20
50
50
15
40
40
30
30
15
60
60
10
10
20
20
5
5
10
10
0
0
0
2002
2004
2006
2008
2010
Source: Official sources / NBK estimates
7
7
6
Jan-13
30
(% y/y, year average)
7
Chart 17. Budget balance
35
3.1
3.0
2.9
2.8
2.7
2.6
2.5
2.4
2.3
2.2
2.1
2012
2014f
0
2002
2004
2006
2008
2010
2012
2014f
MENA Economic Outlook - January 2014
Kuwait: money and finance
Signs of credit growth shifting gear; stock market holds on to gains made in
1H 2013…
•
Improvements in the broader economic
by implementation of the Family Fund law, which
climate have been reflected in financial conditions.
could see around KD 0.4 billion in household debt
Deposit
– 4% of the total – acquired by the government.
and
credit
growth
have
generally
accelerated, spurred on by low interest rates,
comfortable
liquidity
conditions,
a
buoyant
consumer sector and better business confidence.
Meanwhile, corporate profitability has improved
and the stock market has held on to the advances
made in 1H 2013. We expect further steady
improvements in the financial climate in 2014,
though acknowledge the uncertainties for global
markets of the US Fed easing the pace of monetary
stimulus early in the year.
•
Growth in commercial bank assets has also
improved slightly, reaching 10% y/y in October,
supported by stronger credit conditions. (Chart 21.)
Private sector credit accounts for the majority of
all bank assets. The rise in foreign assets – which
had been a driving force behind bank balance
sheet expansion since 2011 – abated in 1H 2013.
This could suggest that banks were utilizing funds
overseas in the absence of better domestic lending
opportunities, which are now materializing.
•
Annual
growth
in
broad
money
(M2)
averaged 10% in the first 10 months of 2013, up
from a 7% average in 2012 and consistent with
decent growth in the broader economy. (Chart 19.)
Growth in the more volatile short-term measure,
M1, has been much stronger – helped by the low
interest rate environment. Private sector deposit
growth has provided further evidence of improved
economic activity, accelerating to 10% y/y in the
first 10 months of 2013, up from 6% through
2012. Overall liquidity conditions would have been
stronger still were it not for government deposits,
which have dipped following a surge in 2012.
•
Growth in private credit accelerated to 8%
in October 2013, its fastest for more than four
years. (Chart 20.) The improvement has been driven
by a pick-up in lending to industry, particularly the
real estate and oil sectors. Although this may
partly reflect some one-off factors, we see it as
supportive of our view of a pick-up in business
sentiment more generally. Moreover, stronger
lending growth has come despite a slight easing in
consumer sector borrowing. The latter, although
still very strong at 17% y/y, may soon be affected
8
•
The Central Bank of Kuwait (CBK) has
maintained its main lending rate, the discount rate,
at 2.0% since October 2012. (Chart 22.) The
benchmark deposit rate – the one-week repo rate –
has remained at 1.5%. Banks’ weighted commercial
lending rates drifted 20 bps lower to 4.6% through
2013 as the impact of the CBK discount rate cut
filtered through the system. Meanwhile, the Kuwaiti
dinar remained more or less unchanged against the
US dollar in 2013, and by extension fell by around
3% against the strengthening euro. (Chart 23.)
•
The 7-month rally in the Kuwait stock
market subsided in mid-2013, but equities managed
to hold onto most of their earlier gains. Despite the
leveling off, the main price-weighted KSE index was
still up by 31% in the year to mid-December, while
the value-weighted index was up a more modest
10%. (Chart 24.) The quieter domestic political
environment, optimism on project implementation
and the Syrian crisis were among the key factors
affecting the market during 2013.
MENA Economic Outlook - January 2014
Kuwait: money and finance charts
Chart 20. Total bank credit
Chart 19. Money supply
(% y/y)
30
(% y/y)
M1
25
M2
20
30
40
40
25
35
35
20
30
30
25
25
20
20
15
15
10
10
5
5
15
15
10
10
5
5
0
0
-5
-5
0
0
-10
-5
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
-5
-10
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Chart 21. Commercial bank assets
55
Bank assets (KD bn, LHS)
Bank assets (% y/y, RHS)
50
Chart 22. Policy interest rates
(%)
40
35
30
45
25
40
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
5
2
2
5
1
1
0
0
Jan-07
Jan-13
KD stronger
0.40
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 24. Stock market indices
0.45
0.40
0.35
0.35
16000
900
KSE General Index (LHS)
Value Weighted Index (RHS)
14000
0.30
0.30
0.25
0.25
6000
0.20
4000
Jan-08
KD/USD (real)
KD/Euro (real)
0.20
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
N.B. Real exchange rate uses Jan 2008 as base period. Calculation
based upon Kwt/US/Euro area CPIs.
Source: Official sources / NBK estimates
9
800
700
12000
600
10000
KD/USD
KD/Euro
5
3
Chart 23. Exchange rate
0.45
6
3
10
25
Jan-07
6
4
15
30
7
US Fed funds target
KD discount
KD repo
4
20
35
7
500
8000
400
300
200
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
MENA Economic Outlook - January 2014
Oman: macro and finance
Non-oil economy to drive growth going forward; fiscal situation remains
vulnerable…
Sultanate’s diversification ambitions. (Chart 27.)
Oman forecast summary
Oman’s
considerable
2015f
3.6
4.0
2.0
0.0
4.2
5.0
3.0
-2.0
% y/y
% y/y
%
% GDP
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
2014f
economy
momentum
should
as
the
Any deficit can be comfortably financed through
reserves or sovereign debt financing. But further
measures to reform spending and boost non-oil
revenues are likely in the medium-term.
maintain
•
Monetary growth eased to its slowest
government
pace for three years in September, at 4.8% y/y
sustains its investment expenditures and oil prices
and 4.6% y/y for M1 and M2, respectively. Credit
remain favorable. Some $50 billion of investments
growth, on the other hand, remained weaker than
– split between the public and private sectors – are
in 2012, but has begun to recover, rising to 9.3%
planned over the coming years, of which $33 billion
y/y in September. (Chart 28.) Given the solid
will be targeted towards the non-hydrocarbon
economic backdrop, credit growth is expected to
sector. The real economy is expected to expand
remain healthy going forward. New regulations
by 4.5% in 2013, slowing to 3.5% in 2014 due to
by the Central Bank of Oman reduced the share
softer growth in the hydrocarbon sector. Growth
of personal loans in banks’ portfolios in favor of
could pick up again in 2015, supported by the
mortgages, as it moved to limit exposure to risky
aforementioned investment spending. (Chart 25.)
loans. The interest rate cap on new loans has also
been decreased to 6% in order to further support
•
Consumer
price
inflation
continued
to
decelerate through 2013, owing largely to declining
global food prices. Inflation stood at just 0.3% y/y
in October, its lowest rate in recent years, and
is expected to have averaged 1.5% in 2013 as
a whole. Strong consumer demand coupled with
decreased power subsidies for some industries may
lead to a modest pick-up in price pressures. Inflation
is expected to average 2.5% over the next two
years. (Chart 26.)
•
growth. Meanwhile, policy rates remain at record
lows, with the last change in the benchmark repo
rate a 1% cut in early 2012. (Chart 29.)
•
Decent
economic
growth
and
relative
domestic stability helped the Muscat Securities
Market recover from a disappointing 2012. The
main price index rose 17% in the year to midDecember, edging close to a post-financial crisis
high. (Chart 30.) But the gains, although decent,
still lagged some other GCC markets, which were
up 13-86%. The industrial segment continued to
After a rapid build-up in recent years, the
lead the way, up 38% by of the end of November.
Omani government is expected to contain future
The sector may continue to drive the market’s
growth in current spending with an eye on fiscal
resurgence as newly tendered projects begin to be
sustainability. We project spending growth of
executed.
around 5% per year in 2014 and 2015. Even so,
the budget could move from a 2% surplus in 2013
to a 2% deficit by 2015, as oil revenues dip and
investment expenditures rise in order to fulfill the
10
MENA Economic Outlook - January 2014
Oman: macro and finance charts
Chart 26. Consumer price inflation
Chart 25. Real GDP
(% y/y)
20
Oil
Non-oil
(% y/y, year average)
NBK
f'cast
Total
15
20
15
14
14
12
12
NBK
f'cast
10
10
10
5
5
0
0
-5
-5
-10
-10
2002
2004
2006
2008
2010
2012
8
6
6
4
4
2
2
0
0
-2
2014f
NBK
f'cast
12
50
50
40
40
30
30
20
20
10
10
12
N/A
N/A
3
N/A
3
-3
0
-3
2010
2012
2014f
15
6
2008
2012
60
6
2006
2010
60
9
2004
2008
18
9
2002
2006
(% y/y)
Headline figure
Before transfers to state reserve funds
0
2004
Chart 28. Bank credit to private sector
(% GDP)
15
-2
2002
Chart 27. Budget balance
18
10
8
2014f
0
Jan-07
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
N.B. Headline figure is not forecast, since it includes discretionary
government transfers to the state reserve funds
Chart 29. Policy interest rates
(MSM 30 index)
(%)
7
US Fed funds target
Oman repo
Oman CDs
6
5
7
12000
12000
6
11000
11000
10000
10000
9000
9000
8000
8000
7000
7000
5
4
4
3
3
2
2
6000
6000
1
1
5000
5000
0
4000
4000
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
0
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Source: Official sources / NBK estimates and forecasts
11
Chart 30. Stock market indices
MENA Economic Outlook - January 2014
Qatar: macro forecasts
Government spending to drive non-hydrocarbon and private sector activity;
rising rents causing moderate inflation; fiscal space to narrow…
demand, underpinned by population growth of
Qatar forecast summary
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
2014f
2015f
5.8
9.7
4.0
5.1
6.6
10.5
4.5
2.9
% y/y
% y/y
%
% GDP
Economic growth has been slowing since
above 7% y/y, should push headline inflation to 4%
y/y and 4.5% y/y in 2014 and 2015, respectively.
(Chart 34.) Moreover, tight conditions in the
residential market will exert upward pressure on
rents in the medium-term. Rent carries the most
weight in the CPI basket.
maximum LNG production capacity was reached in
2011; a moratorium on further projects in Qatar’s
•
giant North Field and conservative management
surpluses are forecast to narrow over the next
of Qatar’s aging oil fields have effectively capped
two years, to 3% and 23% of GDP, respectively.
the country’s hydrocarbon output. The focus has
(Charts 35 and 36.) On the fiscal side, expenditure
now shifted to the non-hydrocarbon sector, with
growth will outpace revenue growth due to the
the government spearheading activities through its
impact of lower projected oil prices on hydrocarbon
ambitious $225 billion infrastructure development
revenues. Note that exports of manufactured
plan. As public investment increases, private sector
products, receipts from corporate taxes and
growth is also likely to be stimulated through
income from investments are, however, expected
positive spill-over effects.
to rise and boost the state coffers during the
Qatar’s
budget
and
current
account
forecast period. Capital spending is also expected
•
Real GDP growth is forecast to continue to
slow, to 5.8% y/y in 2014, before increasing by
6.6% y/y in 2015 as activity in the manufacturing,
financial
services,
tourism
and
construction
to increase substantially in order to catch up
with the development plan’s ambitious spending
targets.
sectors accelerates. (Chart 31.) In addition, the
•
full commissioning of the Barzan gas production
common to regional oil exporters as a whole. In the
facility in 2015 will bring additional volumes
former, the authorities will need to be cognisant of
of hydrocarbon products such as condensates
inflationary impulses associated with double-digit
and natural gas liquids to the market, boosting
growth (non-hydrocarbon sector), mounting public
hydrocarbon GDP. Crude oil production, however,
debt (35% of GDP) – largely due to the issuance of
is not expected to increase substantially above its
bonds – and capacity constraints that have delayed
current band of 0.72-0.74 mbpd. (Chart 32.)
the rollout of the development plan. Sensitivity to
Qatar faces challenges both unique and
oil and gas prices remains a key issue among GCC
•
Rising rental prices and costs in the
entertainment, recreation and culture category were
the dominant drivers of inflation in Qatar in 2013.
Food price inflation, meanwhile, was relatively
restrained compared to previous years. (Chart 33.)
Over the next two years, burgeoning consumer
12
hydrocarbon exporters, especially in the context
of fiscal sustainability. The Qatari authorities are,
however, committed to balance the budget entirely
through non-oil revenues by 2020.
MENA Economic Outlook - January 2014
Qatar: macro forecast charts
Chart 32. Crude oil output
Chart 31. Real GDP
(% y/y)
50
45
40
35
30
25
20
15
10
5
0
Hydrocarbon
Non-hydrocarbon
Total
2002
2004
2006
2008
2010
2012
(mn barrels per day)
50
45
40
35
30
25
20
15
10
5
0
NBK
f'cast
2014F
0.90
0.90
0.88
0.88
0.86
0.86
0.84
0.84
0.82
0.82
0.80
0.80
0.78
0.78
0.76
0.76
0.74
0.74
0.72
0.72
0.70
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
0.70
Chart 33. Consumer price inflation by sector
(% y/y)
Chart 34. Consumer price inflation
(% y/y, year average)
10
10
20
5
5
15
0
0
10
10
-5
-5
5
5
-10
0
0
-15
-5
-5
-20
-10
Total CPI
Food (13%)
Rent, fuel & energy (32%)
-10
-15
-20
Jan-10
Jan-11
Jan-12
Chart 35. Budget balance
30
$ billions
25
30
25
20
20
10
10
0
0
Source: Official sources / NBK estimates and forecasts
13
60
30
5
2014F
70
30
5
0
NBK
f'cast
% of GDP
40
10
2012
2014F
40
10
2010
2012
50
15
2008
2010
50
15
2006
2008
$ billions
60
20
2004
2006
70
20
2002
2004
Chart 36. Current account balance
NBK
f'cast
% of GDP
15
-10
2002
Jan-13
20
NBK
f'cast
0
2002
2004
2006
2008
2010
2012
2014F
MENA Economic Outlook - January 2014
Qatar: money and finance
QCB focusing on financial stability and liquidity management; government
projects drive credit growth; MSCI upgrade to stimulate portfolio inflows…
•
The Qatar Central Bank (QCB) is committed
•
Given that deposit growth had outpaced
to preserving financial stability and managing
credit growth as of October, helped in large part
liquidity and inflation through a mix of macro-
by government deposits in the banking system,
prudential and monetary measures. The authorities
concerns over domestic liquidity have receded.
have launched a strategic plan for the regulation of
The sector’s loan-to-deposit ratio fell from 111%
the financial sector, extended their QR4 billion a
at the end of 2012 to 106% by October 2013.
month program of domestic debt issuance to bonds
Average interbank rates for the year were also down
and sukuk with longer maturities and established
compared to 2012, by 10 bps in the case of the
the QIBOR in 2012 to develop a more liquid and
1-month facility.
transparent interbank market.
•
Qatar’s key lending and deposit rates are
•The broad money supply (M2) continued
unlikely to change from their current levels of
to expand in 2013, albeit at a slower rate than in
4.5% and 0.75%, respectively, given the need for
2012, increasing by 15% y/y in October. (Chart
broad alignment with the US Federal Funds rate
37.) Foreign currency deposits continue to play
in the context of the fixed exchange rate regime.
an important part in the broader monetary picture.
The Fed Funds rate is currently at a historic low
Among the drivers, net foreign assets of the
of 0.25%. (Chart 40.) However, over the medium-
banking system increased significantly in 2013,
term, inflation associated with surging credit and
largely on account of overseas investments and
consumer demand as well as continued monetary
credit by commercial banks as well as an increase
expansion, may need to be addressed by the
in the QCB’s holdings with foreign banks.
authorities.
•
•
Credit growth was a robust 18% y/y as of
Recently, the Qatari riyal, in tandem with
October 2013, with lending to the public sector
the US dollar, has been depreciating against the
outpacing the private sector (Chart 38.) Within the
euro on both a nominal and real basis. If sustained,
private sector, while lending to the real estate and
domestic prices of imports from the eurozone may
construction sectors slowed in 2013, credit to the
rise, adding to inflationary pressures. (Chart 41.)
consumer sector picked up. Overall credit growth
should accelerate further as more development
•
projects are tendered.
strongly in 2013, increasing by 24% YTD as of
The Qatar Exchange (QE) Index performed
November. (Chart 42.) Investor sentiment was also
•
Commercial banks’ assets topped QR900
billion in October, increasing by 14% y/y. (Chart
39.) While credit growth has been the primary
driver of the increase in banks’ assets, domestic
investments have also played an important part;
banks have been increasingly active in the bond
markets, purchasing government-issued domestic
debt.
14
given a boost by the inclusion of Qatar in the MSCI
and S&P Dow Jones Emerging Markets Indices
starting in May and September 2014, respectively.
Markets anticipate greater portfolio inflows. This
has been one factor in lifting Qatari business
optimism to its highest level in almost three years.
MENA Economic Outlook - January 2014
Qatar: money and finance charts
Chart 38. Bank credit
Chart 37. Money supply
(% y/y)
(% y/y)
80
80
M1
60
60
M2
40
40
20
20
0
0
-20
-20
-40
Jan-08
-40
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
160
Total
140
80
Bank assets (% y/y, RHS)
700
70
600
60
500
50
400
40
300
30
200
20
100
10
0
Jan-07
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
120
100
100
80
80
60
60
40
40
20
20
0
0
-20
Jan-07
6.5
6.0
Jan-13
QAR weaker
5.0
4.0
4.0
3.5
3.5
3.0
Jan-11
Jan-12
Jan-13
N.B. Real exchange rate uses Jan 2008 as base period. Calculation
based upon Qatar/US/Euro area CPIs.
Source: Official sources / NBK estimates
15
Jan-13
5
QMR lending rate
QMR deposit rate
US Federal funds target rate
4
3
4
3
2
2
1
1
0
Jan-07
12000
4.5
Jan-10
Jan-12
5
14000
4.5
Jan-09
Jan-11
6
6.5
5.5
Jan-08
Jan-10
(%)
7.0
6.0
5.5
3.0
Jan-07
Jan-09
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 42. Stock market
QAR/USD
QAR/Euro
QAR/USD (real)
QAR/Euro (real)
5.0
-20
Jan-08
6
Chart 41. Exchange rate
7.0
140
Chart 40. Policy interest rates
90
Bank assets (QR bn, LHS)
800
160
Private sector
120
Chart 39. Commercial bank assets
900
Public sector
14000
QE Index
12000
10000
10000
8000
8000
6000
6000
4000
4000
2000
2000
0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
0
MENA Economic Outlook - January 2014
Saudi Arabia: macro forecasts
Non-oil growth moderates on weaker private-sector activity; budget surplus to
shrink despite slowing pace of government spending…
•
KSA forecast summary
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
% y/y
% y/y
%
% GDP
2014f
2015f
3.3
4.5
3.5
7.0
3.7
4.5
4.0
6.0
Economic growth in Saudi Arabia slowed
in 2013 on the back of a small contraction in oil
GDP and a moderation in non-oil sector growth.
Recent labor market disruptions are believed to
have impacted activity in the latter. Over the
Saudi Arabian oil production rebounded by
more than 1 mbpd in the 10 months to September
2013 to a peak of 10.2 mbpd, partly to compensate
for output disruptions in Libya and Iraq. (Chart 44.)
Since then, output has once again fallen back. As
demand weakens and non-OPEC supply continues
to rise, Saudi Arabia – given its unofficial role as
OPEC’s swing producer – is seen making more
significant cuts in 1H 2014 in order to keep prices
close to $100 pb. We expect real oil GDP to fall in
2014 by some 2%, before stabilizing in 2015.
medium-term, growth should remain relatively solid,
supported by high oil prices and implementation of
•
large government projects. Nevertheless, an easing
3.6% in the first 10 months. (Chart 45.) This was
in private sector activity and a moderation in the
driven by higher inflation in the food and housing
pace of overall government spending – as well as
segments, both of which have eased of late. While
heavy downward revisions to official data – have
food price inflation is expected to remain contained,
seen us lower our growth forecasts; we now expect
pressures from residential rents could rise amid a
non-oil growth of 4-5% in both 2014 and 2015,
shortage in affordable housing – a challenge that
compared to up to 6% before. (Chart 43.)
the government is trying to address through a
Inflation edged higher in 2013, averaging
house building program and new mortgage law.
•
Recent data point to softening in the pace
of non-oil private sector activity. The Purchasing
Managers’ Index trended lower through 2013, credit
However, steady economic growth and softer food
prices should keep inflation at a moderate rate of
around 3-4% over the forecast period. (Chart 46.)
growth has eased slightly (though remains strong),
and ATM and point-of-sale figures are off their highs.
•
This may be partly linked to recent labor market
a lower, but still large, surplus of 11% of GDP
initiatives and Saudization efforts which have led
in 2013. (Chart 47.) As oil prices slip further
to a crackdown on illegal foreign workers. The full
and revenues decline, the surplus is projected to
impact of these policies on private sector activity
continue to shrink to around 6-7% of GDP in 2014
has yet to manifest, but there are downside risks
and 2015 – despite moderating expenditure growth.
in the near-term: increased labor costs, disruptions
Further fiscal consolidation could conceivably affect
to labor-intensive sectors (especially construction
capital spending allocations. Nevertheless, a large
and retail), and weaker domestic consumption
number of infrastructure projects – including major
levels. Government infrastructure projects and rapid
transportation and power projects – will be financed
population growth should nevertheless continue to
off-budget, thereby mitigating the impact of any
provide underlying support for steady growth in
curb in spending.
non-oil GDP.
16
The budget is estimated to have registered
MENA Economic Outlook - January 2014
Saudi Arabia: macro forecast charts
Chart 44. Crude oil output
Chart 43. Real GDP
(% y/y)
(mn barrels per day)
20
10.2
10.2
15
9.8
9.8
10
10
9.4
9.4
5
5
9.0
9.0
0
0
8.6
8.6
-5
-5
8.2
8.2
-10
7.8
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
7.8
20
Oil
15
Non-oil
NBK
f'cast
Total
-10
2002
2004
2006
2008
2010
2012
2014F
Chart 46. Consumer price inflation
Chart 45. Consumer price inflation by sector
20
18
16
14
12
10
8
6
4
2
0
-2
Jan-07
(% y/y)
Food (22%)
Housing (20%)
Total CPI
Structural break
in series
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
20
18
16
14
12
10
8
6
4
2
0
-2
(% y/y, year average)
7
6
5
4
4
3
3
2
2
1
1
0
0
2002
Jan-13
35
NBK
f'cast
25
2004
2006
2008
2010
2012
2014F
Chart 48. Current account balance
(% GDP)
30
6
5
Chart 47. Budget balance
35
7
NBK
f'cast
160
$ billions
160
% of GDP
NBK
f'cast
30
140
25
120
120
100
100
80
80
60
60
140
20
20
15
15
10
10
5
5
0
0
40
40
-5
20
20
-10
0
-5
-10
2002
2004
2006
2008
2010
2012
2014F
Source: Official sources / NBK estimates and forecasts
17
0
2002
2004
2006
2008
2010
2012
2014F
MENA Economic Outlook - January 2014
Saudi Arabia: money and finance
Private sector credit growth eases, but remains strong; stock market hits postfinancial crisis peak…
•
Some financial indicators have shown a
In 2Q13, consumer loans grew by some 22% y/y
slight softening in market conditions: both credit
compared with 13% for corporate loans. The new
and monetary growth have slowed from their
mortgage law should also help lift demand for home
peaks. But overall, the Saudi financial sector still
loans, although its impact will likely be gradual.
looks in robust shape: banks are profitable and
well-capitalized, lending growth is still strong and
•
the stock market staged a significant rally in 2013.
projects is expected to provide Saudi banks with
Solid economic growth and implementation of large
new lending opportunities going forward. Given the
government projects should provide continued
low interest rate environment and reliance on short-
support for the financial sector in 2014. Downside
term deposit-based funding, Saudi banks have
risks stem from a prolonging of the recent softening
increasingly tapped the Islamic bond market as an
in private sector activity and possible instability in
alternative source of funds. This should support
global markets.
loan growth, and provide longer-term funding for
The continuing flow of major infrastructure
large-scale projects and mortgages.
•
Growth in liquidity has eased somewhat
in recent months. Annual growth in the broad
•
money supply (M3) decelerated from a 2-year high
to make significant gains. Commercial bank assets
of 16% in May 2013 to 10% in October. (Chart
increased by 11% y/y in the first ten months
49.) Growth in the short-term measure M1 also
of 2013, driven by the continued rise in private
slowed from 19% in mid-2013 to an 11-month low
sector claims. (Chart 51.) However, purchases of
of 15%, as a result of weaker growth in demand
government securities have recently been growing
deposits – which make up more than 60% of total
at a much faster pace, and now account for 12% of
banking system deposits.
all bank assets, up from 10% at the end of 2012.
•
•
Growth in private credit eased back slightly
in 2H 2013, though is still very firm. Lending
growth edged down from its 4-year high of 17%
in May 2013 to 13% in October. (Chart 50.) The
latest softening could be partly explained by the
recent slowdown in private sector activity. But the
slowdown may also be reducing credit growth to
healthier, more sustainable levels.
•
While corporate loans have traditionally
accounted for the bulk of lending, banks have
increasingly focused their attention on the smaller
retail lending segment. The latter has offered
higher margins in a low interest-rate environment.
18
Saudi banks’ balance sheets have continued
SAMA has maintained its key policy rates –
the repo and reverse repo rates – at 2% and 0.25%
respectively. (Chart 52.) The three-month interbank
rate (SAIBOR) was more or less unchanged through
2013, at 1%. This could suggest that – despite
slower monetary growth – liquidity levels in the
system remain comfortable.
•
The Saudi stock market made significant
gains in 2013, with the index reaching its highest
level since the financial crisis. (Chart 54.) The
market was up 22% in the eleven months to
November, led by strong growth in the tourism,
retail, real estate and transportation sectors.
MENA Economic Outlook - January 2014
Saudi Arabia: money and finance charts
Chart 49. Money supply
Chart 50. Bank credit to the private sector
(% y/y)
35
M1
30
M3
(% y/y)
35
40
30
35
40
35
30
30
25
25
25
25
20
20
20
20
15
15
15
15
10
10
5
5
0
0
10
10
5
5
0
Jan-07
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
-5
Jan-07
Chart 51. Commercial bank assets
-5
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 52. Policy interest rates
Thousands
(%)
2000
1800
40
Bank assets (SAR bn, LHS)
Bank assets (%y/y, RHS)
35
6
6
KSA repo
5
US Fed funds target
30
1600
25
1400
20
15
1200
5
4
4
3
3
2
2
1
1
10
1000
5
800
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
0
0
Jan-07
Chart 53. Exchange rate
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 54. Stock market indices
(All share index)
6.0
SAR/USD
SAR/USD (real)
5.5
5.5
5.0
5.0
4.5
4.0
6.0
4.5
SAR stronger
4.0
3.5
3.5
3.0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
3.0
N.B. Real exchange rate uses Jan 2008 as base period. Calculation
based upon KSA/US/Euro area CPIs.
Source: Official sources / NBK estimates
19
12000
12000
11000
11000
10000
10000
9000
9000
8000
8000
7000
7000
6000
6000
5000
5000
4000
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
4000
MENA Economic Outlook - January 2014
UAE: macro forecasts
Non-oil growth strengthens as confidence returns… Inflation edges higher on
rising rents…
expected to fall in early 2014 as OPEC’s leadership
UAE forecast summary
Real GDP
- Non-Oil
Inflation (yr avg)
Budget balance
•
2014f
2015f
2.4
5.0
2.0
5.0
3.7
5.0
3.0
4.0
% y/y
% y/y
%
% GDP
looks to maintain oil prices at around $100 pb in
light of moderate demand and increased supplies
elsewhere. (Chart 56.) However, some recovery in
output could be seen later on in the year, limiting
the average decline for 2014 overall. Overall real
UAE real non-oil GDP is expected to grow
by 4% in 2013 and 5% in 2014 and 2015. (Chart
55.) A wide range of indicators show that economic
activity has gained momentum. The Purchasing
Managers’ Index has risen to an all-time high,
activity and prices in the real estate sector have
rebounded, mothballed projects have been revived
and equity markets have seen a major rally. Indeed,
while economic growth remains well below the
annual average of 9% seen between 2001 and
2008, the buoyancy of asset markets has led to
concerns that optimism has gone too far, and that
preventative policy measures may be needed to
prevent another cycle of boom and bust.
•
Fundamentally,
the
combination
of
Dhabi and Dubai’s ever-building status as a trading
hub remain supportive of the growth outlook.
Dubai’s recent win to host the Expo 2020 will give
the trade, tourism and business services sectors a
further boost: some estimates suggest it will add
0.5% per year to growth in the run-up to the event.
Aside from over-exuberance and a global downturn
to which Dubai in particular would be exposed, the
main economic risk concerns debt restructuring and
repayment issues at government related entities.
However, strong growth and rising asset prices
boost the prospects that debt can be serviced
through revenues and/or asset sales.
UAE crude oil output – having risen strongly
over the past 2 years to above 2.8 mbpd – is
20
3.7% in 2015.
•
Inflation has picked-up from extremely low
2012 levels, but remained modest at 1.3% y/y
in October 2013. (Chart 57.) The recovery in the
real estate sector has been evident in the housing
component, where y/y inflation turned positive in
mid-2013 after falling for the previous three years.
However, given the low starting point for inflation,
lower global food prices, and modest inflation
elsewhere in the region, overall price pressures
should remain contained. We expect an average
inflation rate of 1% in 2013, rising to 2% 2014 and
around 3% in 2015. (Chart 58.)
government-led infrastructure investment in Abu
•
GDP is expected to grow by 2.4% in 2014 and
•
Consolidated
government
spending
is
expected to have fallen in 2013, led by a reduction
in government bailout spending. Despite the billions
of dollars’ worth of projects that the Abu Dhabi
government has proposed to spend on industry,
tourism and infrastructure between 2013 and
2017, aggregate government spending may grow at
a moderate pace in the short-term, especially as the
Dubai government pays off a bulk of its maturing
debt. This will help the budget remain in surplus at
around 4-5% of GDP (including investment income
and oil profits), despite a dip in oil revenues. (Chart
59.) Meanwhile, the current account surplus is
expected to remain buoyant on strong growth in
non-oil exports, which are now worth nearly double
hydrocarbon exports. (Chart 60.)
MENA Economic Outlook - January 2014
UAE: macro forecast charts
Chart 56. Crude oil output
Chart 55. Real GDP
(% y/y)
15
Oil
Non-oil
NBK
f'cast
Total
10
5
15
10
5
0
0
-5
-5
-10
-10
2002
2004
2006
2008
2010
2012
2014F
(mn barrels per day)
2.9
2.8
2.7
2.7
2.6
2.6
2.5
2.5
2.4
2.4
2.3
2.3
2.2
2.2
2.1
2.1
2.0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
2.0
Chart 58. Consumer price inflation
Chart 57. Consumer price inflation by sector
(% y/y)
10
Total CPI
8
Food (14%)
Housing (39%)
10
14
8
12
6
6
4
4
2
2
0
0
-2
-2
-4
-6
Jan-09
Jan-10
Jan-11
Jan-12
(% y/y, year average)
12
10
8
6
6
4
4
-4
2
2
-6
0
0
2002
20
NBK
f'cast
15
10
5
5
0
0
-5
-5
-15
-20
2004
2006
2008
2010
2012
2014F
Source: Official sources / NBK estimates and forecasts
21
2006
2008
2010
2012
2014F
70
NBK
f'cast
$ billions
60
% of GDP
70
60
50
50
40
40
30
30
20
20
-15
10
10
-20
0
-10
Headline figure
Incl inv inc & ADNOC profits
2002
2004
Chart 60. Current account balance
(% GDP)
10
-10
10
8
Jan-13
15
14
NBK
f'cast
Chart 59. Budget balance
20
2.9
2.8
0
2002
2004
2006
2008
2010
2012
2014F
MENA Economic Outlook - January 2014
UAE: money and finance
Financial sector recovery continues, though debt burden remains large…
Equity markets rally on improved confidence levels…
•
Financial conditions continue to gradually
•
The main policy interest rate (the repo rate)
recover, commensurate with the improvement in the
has remained unchanged at 1% since the start
broader economy. Corporate debt restructuring has
of 2009. (Chart 64.) Commercial interest rates,
progressed, liquidity conditions have improved, and
however, have generally eased, reflecting improved
asset prices have risen, benefiting both confidence
liquidity conditions. The three-month interbank rate,
and bank balance sheets. However, the recovery
for example, fell 0.5% points to 0.8% in the year
is far from complete. Credit growth – although
to mid-December, falling below the equivalent rate
showing some signs of recovery of late – remains
in Saudi Arabia for the first time since the financial
modest, non-performing loans remain high and –
crisis. CDS spreads on 5-year Dubai government
despite the restructurings – the debt overhang from
debt looked set to end 2013 at around 225 points,
the financial crisis remains large, and could drag on
around one-third lower than their average in 2012.
growth for some time. Meanwhile, concerns over
the strong rebound in real estate prices have led to
calls for new regulations to prevent future financial
sector instability.
•
While the recent recovery in real estate
prices will benefit lenders, the authorities are
striving to strengthen lending regulations to
mitigate the effects of or prevent future crises.
•
Annual growth in the broad M2 money
The measures that have already been announced
supply measure climbed to 13% y/y in September,
include a tightening of lending limits on large
after being subdued for much of 2012. (Chart 61.)
exposures, new liquidity requirements and caps on
The narrower money supply measure, M1, is also
mortgage lending. However, they have yet to come
on the rise, logging in a growth rate of 22% y/y in
into effect. So far, only the proposed increase in
September. The acceleration in monetary growth
real estate transaction fees was implemented, last
is one indication of an improvement in liquidity
October.
conditions in the system.
•
•
Growth in bank credit has shown some signs
of improvement, rising to 7% y/y in September.
(Chart 62.) This was its fastest rate of the postfinancial crisis period. Bank provisions remain on
the rise, but at a declining pace: overall provisions
rose by 14% y/y in September, down from
19% at end-2012. The financial and economic
outlook will be affected by whether or not the
debt of ‘Dubai Inc.’ and the Dubai government
can be successfully serviced or repaid. Their
combined debt is estimated to stand at $131
billion (according to the IMF), with $30 billion due
to mature in 2014.
22
UAE equities enjoyed a stellar 2013, once
again outperforming their GCC peers. (Chart 66.)
The main Abu Dhabi index rose by 52% between
January and mid-December, while the Dubai index
surged an even more impressive 91%. The rally
was driven by an improvement in the corporate
debt environment, signs of a stronger real estate
market and the announcement of the UAE’s upgrade
to ‘emerging’ status by MSCI. Dubai in particular
managed to sustain its run in 2H 2013, benefitting
from its successful bid to host the Expo 2020.
MENA Economic Outlook - January 2014
UAE: money and finance charts
Chart 62. Bank lending
Chart 61. Money supply
(% y/y)
70
60
M1
50
M2
70
70
60
60
50
40
40
30
30
20
20
10
10
0
0
-10
-10
-20
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
-20
(% y/y)
70
60
Loans and advances
Private sector claims
50
50
40
40
30
30
20
20
10
10
0
0
-10
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
-10
N.B. Claims data exclude official entities & non-bank financial institutions.
Private sector accounts for around 75% of all domestic claims.
Chart 63. Commercial bank assets
Chart 64. Policy interest rates
(%)
2000
Bank assets (AED bn, LHS)
1900
Bank assets (% y/y, RHS)
1800
1700
1600
1500
1400
1300
1200
1100
1000
900
800
700
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
60
6
6
50
5
5
40
4
30
3
3
20
2
2
10
1
1
0
0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
0
UAE repo
US Fed funds target
4
N.B. UAE repo rate was established in November 2007.
Chart 65. Exchange rate
6.0
Chart 66. Stock market indices
6.0
6000
5.5
5.5
5000
5.0
5.0
4000
4000
4.5
3000
3000
4.0
2000
2000
3.5
3.5
1000
1000
3.0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
3.0
AED stronger
4.5
4.0
AED/USD
AED/USD (real)
AED/Euro
AED/Euro (real)
N.B. Real exchange rate uses Jan 2008 as base period. Calculation
based upon UAE/US/Euro area CPIs. Not available before 2008.
Source: Official sources / NBK estimates
23
6000
Dubai General Index
Abu Dhabi All Securities Index
0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
5000
0
MENA Economic Outlook - January 2014
Egypt: macro forecasts
Slow recovery expected later in 2014, as risks moderate…
low at an estimated 3.7 months of imports, they
Egypt forecast summary (fiscal year)
Real GDP
Inflation (yr avg)
Budget balance
•
% y/y
%
% GDP
2014f
2015f
3.0
9.0
-10.1
4.0
9.0
-9.5
Egypt’s economic recovery came to a halt
in 2013 following the political impasse reached
months into the presidency of Muhammad Mursi
and his removal from office in July this year. The
economy has yet to show signs of a return to
accelerating growth, though the political outlook
has improved. We expect this fiscal year ending
June 2014 (FY13/14) to show real growth steady
at around 2.2%, with the pace accelerating
somewhat next year to 3%. (Chart 67.)
should improve further as the political transition is
completed and investors return.
•
The fiscal position remains tenuous with the
fiscal deficit rising to 13.6% of GDP in FY 12/13.
With the government focused on security and the
political transition, addressing ballooning subsidies
remains a challenge. To be sure, the government
has taken some steps in recent months to bring
fuel subsidies under control, including introducing
a “smart card” to better target subsidies to lower
income citizens. Still, cuts in key subsidies have
been avoided. As a result, the cost of subsidies
alone rose to 11% of GDP. We expect the
government to make some progress on the fiscal
deficit in the coming months, which should help
•
The tourism sector was the hardest hit as
visitors stayed away. The number of tourist nights
during the first eight months of 2013 was down
by 5.5% compared to the previous year. As a
result, the restaurants & hotels and transportation
sectors have been negatively affected. Other
sectors also saw slower growth, including oil &
reduce the deficit to 12.5% of GDP in FY13/14
and further to 10% in FY14/15. (Chart 71.) We
do not expect the government to face difficulties
funding the deficit for the time being, especially
with the massive GCC support and ample funding
from banks. The public debt reached 102% of GDP
in June 2013.
gas, manufacturing and construction. We expect
all these sectors to improve in the coming months
•
as political risk diminishes and investor sentiment
reaching 13% y/y in November, from a low of 4.3%
improves.
in December 2012. (Chart 69.) While the pound’s
Inflation accelerated substantially in 2013,
depreciation was responsible for much of that rise
•
The country has seen its external position
stabilize in part as new capital controls were
imposed at the start of 2013 and the currency was
allowed to depreciate. Pressures eased further with
the GCC pledging substantial financial support in the
form of deposits and grants (at least $12 billion),
which have shored up Egypt’s official reserves.
The current account deficit also improved notably
in FY12/13, narrowing nearly by half to 2.1% of
GDP. (Chart 72.) While reserves remain relatively
24
in the early part of 2013, it has recently picked up
again for other reasons. Part of the rise was linked
to strong seasonal increases in food prices. In
addition, recent months have seen large increases
in the price of “regulated items” including butane
cylinders (cooking fuel) and water prices. The latter
saw the first official price adjustment in nearly four
years.
MENA Economic Outlook - January 2014
Egypt: macro forecast charts
Chart 68. Production index
Chart 67. Real GDP
(% y/y)
10
9
8
7
6
5
4
3
2
1
0
FY02/03
(% y/y)
NBK
f'cast
FY05/06
FY08/09
FY11/12
10
9
8
7
6
5
4
3
2
1
0
FY14/15
40
30
Core
Headline
10
10
0
0
-10
-10
-20
-20
-30
Jan-07
20
15
15
0
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
(% y/y, year average)
18
NBK
f'cast
14
16
14
10
8
6
6
5
4
4
2
2
0
0
0
-4
-4
-6
-6
-8
-8
-10
-10
-12
-12
NBK
f'cast
-16
-14
-16
FY13/14
Source: Official sources / NBK estimates and forecasts
25
18
8
-2
FY10/11
Jan-13
12
-2
FY07/08
Jan-12
0
FY02/03
FY05/06
FY08/09
FY11/12
FY14/15
Chart 72. Current account balance
(% GDP)
FY04/05
Jan-11
10
Jan-13
-14
Jan-10
Chart 70. Consumer price inflation
Chart 71. Budget balance
0
Jan-09
12
10
5
-30
Jan-08
16
20
10
30
20
(% y/y)
25
Monthly
20
Chart 69. Consumer price inflation by sector
25
40
12 mth avg
(% GDP)
5
4
3
2
1
0
-1
-2
-3
-4
-5
FY02/03
FY05/06
FY08/09
5
4
3
2
1
0
-1
-2
-3
-4
-5
FY11/12
MENA Economic Outlook - January 2014
Egypt: money and finance
Stock market recovers on improved outlook; GCC financial support helps
stabilize pound…
•
While political instability and slow growth
of -3%. Credit growth had picked up in the spring,
have taken their toll, financial conditions in Egypt
when the annualized 2-month moving average rate
remain in check. New capital controls and the
of growth reached 16%. It has since slowed to a
decision to depreciate the pound have helped reduce
negative 3%. (Chart 74.)
the pressure on the currency. The pound has
now stabilized, especially following the substantial
financial support pledged by GCC allies. (Chart 77.)
This has allowed the Central Bank of Egypt (CBE) to
reduce policy rates in an effort to ease pressure on
the fiscal deficit and give authorities the space to
raise rates in the event of renewed pressure.
•
Despite
the
uncertainty,
the
Egyptian
banking system remains robust. While the level
of nonperforming loans (NPLs) at Egyptian banks
remains elevated by international standards for
historic reasons, they have not increased since
2011. NPLs to gross loans were 9.5% in June
2013 and provisions are ample. While capitalization
•
Money supply growth picked up considerably
has come off somewhat, the capital adequacy
after the CBE restricted the availability of foreign
ratio remains healthy at 13.4%. Meanwhile, the
currency at the start of 2013. M2 growth
increased exposure of banks to Egyptian sovereign
accelerated to 19% y/y through October 2013
debt is a growing concern for banks.
from 12% in December 2012, to reach its most
rapid pace since 2008. (Chart 73.)
•
Egypt’s stock market rallied since June,
reflecting improved general sentiment felt by
•
The boost in liquidity has helped alleviate
investors and the feeling that the current political
the funding pressures faced by the government,
transition is more likely to produce an inclusive and
with lending to the public sector by local banks
more business-friendly government. The EGX30
rising to 51% of system assets. The ratio doubled
rose by 43% between late June and mid-December
from three years ago. As a result, the interest rate
2013. However, Egypt’s market has underperformed
on domestic government debt has eased to its
other regional markets in 2013, and it remains 10%
lowest level since Mubarak’s ouster. The 3-month
below levels pre-dating the removal of Mubarak in
treasury bill rate fell to 11.4%, reflecting the
early 2011. (Chart 78.)
abundance of domestic funding. (Chart 76.)
•
•
Still, investors remain wary of Egypt’s
Credit to the private sector, meanwhile, has
elevated risks. This is particularly apparent in
suffered in tandem with the slowdown in economic
the country’s credit default swap (CDS), which
activity. Growth in lending to the private sector
continued to trade at elevated levels. At 667 basis
was only just beginning to recover in early 2013
points in November 2013, the rate remained well
when it slowed once again as a result of political
above the 393 bps level registered a year earlier.
uncertainty. Bank claims on the corporate sector
Egypt’s 2020 USD bond issue also reflected the
grew by only 7.4% y/y in October. With inflation in
heightened risk, yielding 7.4% in November 2013,
the double digits, this amounts to a real growth rate
compared to 5.3% a year before.
26
MENA Economic Outlook - January 2014
Egypt: money and finance charts
Chart 74. Bank lending
Chart 73. Money supply
(% y/y)
35
M1
30
(% y/y)
M2
25
35
35
30
30
25
35
Household
Corporate
Total
25
30
25
20
20
15
15
10
10
20
20
15
15
10
10
5
5
5
5
0
0
0
Jan-07
0
-5
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 75. Commercial bank assets
-5
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 76. Policy interest rates
(%)
1700
EGP bn (LHS)
1600
% y/y (RHS)
18
18
16
16
14
14
14
12
12
10
10
8
8
6
6
2
4
4
0
2
2
-2
0
Jan-07
1500
12
1400
10
8
1300
6
4
1200
1100
1000
Jun-09
Jun-10
Jun-11
Jun-12
Jun-13
CBE discount rate
Chart 77. Exchange rate
58
5.0
5.5
52
6.0
50
48
6.5
46
44
42
40
Jan-07
Nominal Effective Exchange Rate (LHS)
7.5
Jan-08
Jan-09
Jan-10
Jan-11
Source: Official sources / NBK estimates
27
7.0
EGP/USD (RHS, inverted)
Jan-12
Jan-13
16
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Chart 78. Stock market indices
56
54
18
3-month t-bill
14000
12000
EGX30 index
14000
12000
10000
10000
8000
8000
6000
6000
4000
4000
2000
2000
0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
0
MENA Economic Outlook - January 2014
Regional macroeconomic data and forecasts
GCC
Unit
2009
2010
2011
2012
2013
2014f
2015f
$ bn
%y/y
%y/y
%y/y
% GDP
% GDP
% y/y
22.9
2.5
-0.4
3.4
-5.2
2.4
2.8
25.6
4.3
0.1
5.5
-4.8
3.0
2.0
29.0
2.1
3.6
1.7
-0.3
11.2
-0.4
30.3
3.4
-8.5
6.7
-2.0
7.3
2.8
32.1
3.9
8.0
3.0
-3.0
6.0
3.2
33.1
2.8
2.0
3.0
-5.0
4.0
3.0
34.7
2.6
1.0
3.0
-5.0
4.0
3.0
$ bn
%y/y
%y/y
%y/y
% GDP
% GDP
% y/y
106.0
-7.1
-12.8
-3.2
21.1
26.8
4.6
119.9
-2.4
0.5
-4.1
15.4
31.0
4.6
160.6
10.2
14.9
4.0
29.8
41.9
4.8
183.4
8.3
11.8
3.1
24.8
43.3
3.3
179.0
0.3
-2.0
4.0
22.0
40.0
2.6
174.2
-0.6
-4.0
4.5
20.0
35.0
3.0
181.9
3.1
2.0
4.5
19.0
33.0
3.5
$ bn
%y/y
%y/y
%y/y
% GDP
% GDP
% y/y
48.2
3.9
8.1
2.3
0.6
-1.0
3.5
58.8
5.0
5.8
4.6
3.6
8.6
3.3
69.9
4.0
0.0
5.7
7.3
12.8
4.0
78.0
6.0
4.3
6.6
0.5
10.4
2.9
79.8
4.4
4.0
5.0
2.0
9.9
1.3
81.3
3.6
2.0
4.0
0.0
8.0
2.0
83.4
4.2
2.0
5.0
-2.0
6.0
3.0
$ bn
%y/y
%y/y
97.8
12.0
4.5
127.4
16.7
28.8
171.4
13.0
15.8
192.2
6.2
1.7
207.6
6.1
0.8
215.6
5.8
0.4
229.1
6.6
0.6
-       Non-hydrocarbon sector
%y/y
17.6
8.6
10.7
10.0
10.2
9.7
10.5
Budget balance (financial year)
Current account balance
Consumer prices
% GDP
% GDP
% y/y
15.2
6.1
-4.9
2.9
22.8
-2.4
7.7
30.4
1.9
11.8
32.4
1.9
9.1
29.3
3.2
5.1
26.4
4.0
2.9
22.9
4.5
$ bn
%y/y
%y/y
%y/y
% GDP
% GDP
% y/y
429.1
1.8
-8.8
4.9
-5.4
4.7
4.1
526.8
7.4
0.2
9.2
4.4
12.5
3.8
669.5
8.6
12.4
7.7
11.6
21.8
3.7
711.0
5.1
5.7
5.0
14.0
21.1
2.9
727.7
3.0
-1.0
4.0
11.0
16.0
3.5
728.1
3.3
-2.0
4.5
7.0
10.0
3.5
765.6
3.7
0.0
4.5
6.0
9.0
4.0
$ bn
%y/y
%y/y
%y/y
% GDP
% GDP
% y/y
254.8
-4.8
-8.9
-2.9
-12.9
3.1
1.6
287.4
1.7
3.8
0.7
-1.8
2.5
0.9
348.6
3.9
6.6
2.6
3.2
14.6
0.8
383.8
4.4
6.3
3.5
7.7
17.3
0.7
387.6
4.7
5.0
4.0
6.0
15.0
1.0
399.2
2.4
-3.0
5.0
5.0
14.0
2.0
403.9
3.7
1.0
5.0
4.0
13.0
3.0
$ bn
% y/y
% GDP
% GDP
% y/y
219.4
5.1
-8.2
-2.4
11.7
236.3
1.8
-10.0
-2.0
11.1
261.3
2.2
-10.6
-2.6
8.6
276.1
2.1
-13.6
-3.9
6.9
288.0
2.2
-12.6
-2.1
10.8
322.9
3.0
-10.1
9.0
365.4
4.0
-9.5
9.0
61.5
421.1
0.698
0.25
1,168
3.0
-0.4
79.5
520.3
0.747
0.25
1,280
5.5
5.2
11.2
482.0
0.773
0.25
1,183
3.9
3.9
111.6
484.1
0.758
0.25
1,339
4.6
3.2
108.9
457.3
0.736
0.25
1,603
2.1
2.9
100.0
3.8
3.6
100.0
4.2
4.0
Bahrain
Nominal GDP
Real GDP
-       Hydrocarbon sector
-       Non-hydrocarbon sector
Budget balance
Current account balance
Consumer prices
Kuwait
Nominal GDP
Real GDP
-       Hydrocarbon sector
-       Non-hydrocarbon sector
Budget balance (financial year)
Current account balance
Consumer prices
Oman
Nominal GDP
Real GDP
-       Hydrocarbon sector
-       Non-hydrocarbon sector
Budget balance
Current account balance
Consumer prices
Qatar
Nominal GDP
Real GDP
-       Hydrocarbon sector
Saudi Arabia
Nominal GDP
Real GDP
-       Hydrocarbon sector
-       Non-hydrocarbon sector
Budget balance
Current account balance
Consumer prices
UAE
Nominal GDP
Real GDP
-       Hydrocarbon sector
-       Non-hydrocarbon sector
Budget balance
Current account balance
Consumer prices
MENA
Egypt (financial year)
Nominal GDP
Real GDP
Budget balance
Current account balance
Consumer prices
International data (end year unless otherwise stated)
Brent crude oil spot price (yr avg)
CRB commodity price index
Eur/USD
US Fed Fund Rate
World MSCI stock market index
MENA real GDP (IMF, yr avg)
World real GDP (IMF, yr avg)
US $ p/b
Index
1$ = €
%
Index
%y/y
%y/y
Source: Thomson Reuters Datasteam, official sources, and NBK Economic Research. Includes some NBK estimates.
28
Head Office
International Network
Kuwait
National Bank of Kuwait SAK
Abdullah Al-Ahmed Street
P.O. Box 95, Safat 13001
Kuwait City, Kuwait
Tel: +965 2242 2011
Fax: +965 2259 5804
Telex:22043-22451 NATBANK
Bahrain
National Bank of Kuwait SAK
Bahrain Branch
Zain Tower, Building 401, Road
2806, Seef Area 428,
P.O. Box 5290, Manama
Kingdowm of Bahrain
Tel: +973 17 155 555
Fax: +973 17 104 860
www.nbk.com
National Bank of Kuwait
Bahrain Branch (H.O)
GB Corp Tower
Block 346, Road 4626
Building 1411
P.O. Box 5290, Manama
Kingdom of Bahrain
Tel: +973 17 155 555
Fax: +973 17 104 860
Jordan
National Bank of Kuwait SAK
Amman Branch
Shareef Abdul Hamid Sharaf St
P.O. Box 941297
Shmeisani, Amman 11194
Jordan
Tel: +962 6 580 0400
Fax: +962 6 580 0441
Saudi Arabia
National Bank of Kuwait SAK
Jeddah Branch
Al Khalidiah District,
Al Mukmal Tower, Jeddah
P.O. Box 15385, Jeddah 21444,
Kingdom of Saudi Arabia
Tel: +966 2 603 6300
Fax: +966 2 603 6318
While every care has been taken
in preparing this publication,
National Bank of Kuwait accepts
no liability whatsoever for any
direct or consequential losses
arising from its use. Economic Brief
is distributed on a complimentary
and discretionary basis to NBK
clients and associates. This report
and previous issues can be
found in the “Reports” section
of the National Bank of Kuwait’s
web site. Please visit our web
site, www.nbk.com, for other
bank publications. For further
information please contact
NBK Economic Research at:
Tel: (965) 2259 5500
Fax: (965) 2224 6973
Email:[email protected]
Lebanon
National Bank of Kuwait
(Lebanon) SAL
BAC Building
Justinian Street, Sanayeh
P.O. Box 11-5727, Riyad El Solh
Beirut 1107 2200, Lebanon
Tel: +961 1 759700
Fax: +961 1 747866
Iraq
Credit Bank of Iraq
Street 9, Building 178
Sadoon Street, District 102
P.O. Box 3420, Baghdad, Iraq
Tel: +964 1 7182198/7191944
+964 1 7188406/7171673
Fax: +964 1 7170156
Egypt
Al Watany Bank of Egypt
Plot 155, City Center, First Sector
5th Settlement, New Cairo
Egypt
Tel: +20 2 26149300
NBK Capital
United Arab Emirates
National Bank of Kuwait SAK
Dubai Branch, Sheikh Rashed Road
Port Saeed Area
ACICO Business Park
P.O. Box 88867, Dubai UAE
Tel: +971 4 292 9222
Fax: +971 4 294 3337
Kuwait
NBK Capital
38th Floor, Arraya II Building
Shuhada’a Street, Sharq
P.O. Box 4950, Safat 13050
Kuwait
Tel: +965 2224 6900
Fax: +965 2224 6904
National Bank of Kuwait,
Abu Dhabi Branch
Airport Road, next to Abu Dhabi
Education Council, Abu Dhabi, UAE
P.O.Box:113567, Abu Dhabi
Tel: +971 2 222 2727
Fax: +971 2 222 2477
United Arab Emirates
NBK Capital Limited
Precinct Building 3, Office 404
Dubai International Financial Center
P.O. Box 506506, Dubai
United Arab Emirates
Tel: +971 4 365 2800
Fax: +971 4 365 2805
United States of America
National Bank of Kuwait SAK
New York Branch, 299 Park Avenue
New York, NY 10171, USA
Tel: +1 212 303 9800
Fax: +1 212 319 8269
United Kingdom
National Bank of Kuwait
(International) Plc
Head Office, 13 George Street
London W1U 3QJ, UK
Tel: +44 20 7224 2277
Fax: +44 20 7224 2101
National Bank of Kuwait
(International) Plc
Portman Square Branch
7 Portman Square
London W1H 6NA, UK
Tel: +44 20 7224 2277
Fax: +44 20 7486 3877
France
National Bank of Kuwait
(International) Plc
Paris Branch
90 Avenue des Champs-Elysees
75008 Paris, France
Tel: +33 1 5659 8600
Fax: +33 1 5659 8623
Turkey
NBK Capital
Arastima ve Musavirlik AS
SUN Plaza, 30th Floor
Dereboyu Sk. No.24
Maslak 34398, Istanbul, Turkey
Tel: +90 212 276 5400
Fax: +90 212 276 5401
Associates
Qatar
International Bank of Qatar (QSC)
Suhaim bin Hamad Street
P.O. Box 2001
Doha, Qatar
Tel: +974 4447 8000
Fax: +974 4447 3710
Turkey
Turkish Bank
Valikonagl CAD. 7
Nisantasi 34371,
Istanbul, Turkey
Tel: +90 212 373 6373
Fax: +90 212 225 0353
Singapore
National Bank of Kuwait SAK
Singapore Branch
9 Raffles Place #24-01/02
Republic Plaza
Singapore 048619
Tel: +65 6222 5348
Fax: +65 6224 5438
China
National Bank of Kuwait SAK
Shanghai Representative Office
Suite 1003, 10th Floor, Azia Center
1233 Lujiazui Ring Road
Shanghai 200120, China
Tel: +86 21 6888 1092
Fax: +86 21 5047 1011
© Copyright Notice. Economic Brief is a publication of National Bank of Kuwait. No part of this publication
may be reproduced or duplicated without the prior consent of NBK.