Commodity price shock is a mixed blessing for MENA

Russia’s invasion of Ukraine and the evolving global response will be felt in the MENA economies mainly via the impact on commodity prices. Fuel exporters are near-term beneficiaries of oil around $110pb, which lifts export and budget revenues, but we estimate the higher price leads to a 0.1-0.4pp hit to GDP growth in regional energy importers this year.

What you will learn:

• Soaring energy and food prices will lead to substantially higher near-term inflation.
• Energy exporters will be better placed to support households, but importers, Egypt in particular, face a more difficult balance between fiscal challenges and the strain on consumers.
• The drop in outbound travel from Russia and Ukraine will undermine tourism recovery in Turkey and Egypt, adding to worries about their external positions and pressuring assets.