Education, information as well as Communication, FinTech as well as pharmaceuticals for powering an economical growth.
The Atradius based report, recently stated that MENA territory will view an economic expansion of 3.6 percent within 2021 and 4 percent within 2022, mostly powered by Non-Oil sector as the oil rates are unlikely to surge up pointedly within the near future.
The most gifted arena to aid the expansion drive includes Education, Data as well as Communication, FinTech as well as pharmaceuticals, added latest MENA economic report via Atradius, global provider for credit insurance, surety as well as collection services.
Other focussed ranges are assisting the expansion of the manufacturing sector in MENA’s thrust for renewables. The Oil-dependent economies of the MENA territory can restrict threat caused due to Pandemic as well as revitalize expansion by focussing primarily on Fiscal Consolidation, technological innovation, as well as economic diversification, it further stated.
Rocked all through geopolitical issues as well as a range of societal matters, the MENA territory-A grouping that includes GCC nations-has further worsened via the Pandemic as well as it also faces unprecedented slump down of a -7.0% during 2020. It is within the national’ best interests for powering the diversification efforts, that had been underway for few times off now, all in order for securing longer-term expansion, as according for expansion.
Transformations in the oil industry have seen old-style oil exporters cede market share to the US shale industry and misplace control over the price of oil while a probable easing of sanctions on Iranian oil exports poses another hazard, leaving even the most financially vigorous GCC countries, such as Kuwait, Saudi Arabia, UAE and Qatar, vulnerable and struggling to uphold current living standards for coming generations, according to the report.
As the steady flow of petrodollars — which helps deposit government spending and private consumption — has diminished, it has contributed to broadening the persistent twin deficits of the area’s economies. This, in turn, is dampening the policy tools at the disposal of MENA governments and hurting their capability to provision other traditional growth engines, such as building and real estate, which contribute between 10-15% to the GDP of GCC countries, according to the report.
“The twin oil-coronavirus catastrophe has had a huge negative impact on most sectors in the non-oil economy with noteworthy credit risk implications,” noted Schuyler D’Souza, Managing Director Middle East, Atradius.
“The IMF in its latest report on the region estimates that the default risk for corporates has doubled and Atradius can confirm that payment performance has depreciated across the feebler sectors due to deteriorating demand, cash flow limits and insufficient support from banks.”
Other core findings include: –
• In Saudi Arabia, pro-growth policies are expected to recover the construction sector while hydrocarbon investments will reinforce growth in the medium term alongside diversification efforts as part of Vision 2030. Local skill shortages coupled with an exodus of expats is core challenges.
• Egypt’s accommodative monetary policy is expected to moderately offset a decline in tourism, infrastructure spending will enhance the construction while new gas finds will boost exports.
• The UAE, one of the most diversified Gulf states, has a promising medium-term outlook. Its prolonged recovery will be encouraged by the postponed World Expo, its ability to charm foreign investment, and its status as a renewables pioneer.
“North African economies, specifically Morocco and Tunisia, can shape on the ongoing shift to high-tech manufacturing and enlargement of their trade networks while the Middle East is well endowed with renewable energy sources and raising funds for renewable energy projects is becoming easier,” noted Niels De Hoog, Senior Economist, Atradius. “These efforts must be taken to the next level because holding on to the current economic model will form an increasing drag on growth.”