Economy

Oman: Bouncing back

The lifting of a rating agency's temporary cloud over the Oman economy and a healthy forecast for GDP growth have combined to create an air of optimism in the Sultanate. On July 20 Standard & Poor’s removed Oman from CreditWatch, with the country’s long-term local and foreign currency rating at A, and the short-term rating at A-1. The exit from the CreditWatch list, which is used to warn bond issuers of the need to address negative factors that could affect their credit ratings, confirms that the country is recovering well from the unrest that affected the region in the first few months of the year. Source: Oxford Business Group

Political reform starts - Fitch Affirms Bahrain stable outlook at BBB rating

Fitch Ratings has affirmed Bahrain's Long-term foreign currency Issuer Default Rating (IDR) at 'BBB' and its local currency IDR at 'BBB+' and removed them from Rating Watch Negative (RWN). The Outlook is Stable. The agency has simultaneously affirmed Bahrain's Country Ceiling at 'BBB+' and Short-term foreign currency IDR at 'F3', Global Arab Network reports according to a press statement. The resolution of the RWN and affirmation of the rating reflects Fitch's view that the near term risks to the political and economic outlook have abated following the lifting of the state of emergency on 1 June. The Stable Outlook reflects Fitch's judgment that the fiscal and economic damage inflicted by the events of Q111, and the worsening of Bahrain's political climate, which is likely to prove long-lasting, are adequately reflected in its 'BBB' rating. Source: Global Arab Network

Jordan: Maintaining the economic line

Jordan’s government has undergone major overhaul with almost one third of all cabinet ministers reshuffled by Prime Minister Marouf Bakhit. Nonetheless, this does not appear to flag any major shift in economic policy. Though the July 2 shake-up was extensive, with nine ministers either being replaced or transferred to different positions and two new ministries created, it is noteworthy that only one of these changes directly involved a major economic portfolio: Mohammad Barakat Al Zuhair was named as the minister of state for economic affairs, one of the two newly created posts in the cabinet. Key cabinet members Mohammad Abu Hammour, the minister of finance, and Hani Mulki, who holds the industry and trade portfolio, were retained, as were the labor and planning and international co-operation ministers, Mahmoud Al Kafawin and Jafar Hassan. This could serve as an indicator that there remains solid support for the economic policies being implemented despite the difficult conditions at home and abroad. Recent data issued by state agencies suggest that these policies are paying off. According to the finance minister, the government was well positioned to keep its deficit within the 5.5% of GDP as projected at the beginning of the year, despite rising inflation. Thanks to increased state revenue and foreign aid, the shortfall in the budget for the first three months of the year was $209.5 million, 38% down on the first quarter of 2010, Abu Hammour told Reuters in mid-June. The government has forecast GDP expansion of 3.5%, though it may not achieve this goal, especially given the unrest in the region that is slowing economic growth across the Middle East. This climate is also weakening confidence in the tourism sector, a major revenue earner for Jordan that accounts for around 14% of GDP and generated $3.4 billion last year, according to finance ministry figures. Data released by the DoS in late June showed that GDP grew by 2.26% in the first quarter of 2011, better than the 2.03% recorded for the same period last year but still shy of the government’s target. Along with the tourism industry, which has seen revenue dip by some 11% this year, the previously vibrant construction sector posted a retreat of 17.7% year-on-year. Source: Oxford Business Group

Morocco witnessing 20% goods export increase

Morocco's goods exports increased by 19.8%, totaling 84.7 billion dirhams up to end June 2011, compared to 70.7 billion dirhams during the same period of last year, said Morocco's exchange rate monitoring body, Office des changes. The increase is mainly due to foreign sales of phosphates and by-products, which reached 22.8 billion dirhams (+44.4%), the Office added. On their part, goods imports rose by 22.5%, reaching 178.23 billion dirhams at the end of the first half of 2011, against 145.5 billion dirhams a year earlier. The rise is attributed to a 41% increase in energy products imports (44.9 billion dirhams against 31.9 billion dirhams) and an increase of 17.3% of imports excluding energy products. Source: Maghreb Arabe Presse

Bahrain reaffirms currency peg to US dollar

Bahrain's central bank governor has re-affirmed his country's commitment to maintain its currency peg to the US dollar, following Standard & Poor's US rating downgrade. Rasheed Al-Maraj has told a local Arabic daily newspaper that the exchange rate policy followed the economic situation. Al Ayam newspaper has quoted Al-Maraj saying: ""The central bank is working to secure a stable financial policy to support economic growth in Bahrain and to help the commercial sector from the volatility risk in the dollar exchange"". Source: Al Ayam Newspaper

Basra holds Iraqi-British economic conference

Basra Investment Body said it is getting preparing to hold an Iraqi-British Economic Conference aimed to create joint partnerships. In a press statement, the Body’s Chairman, Hayder Ali Fadhil, said, “The Conference aims to develop investment and create Iraqi-British partnership that contributes toward developing the province’s economy.” He pointed out that the British Consulate in Basra will participate in developing the province and its infrastructure by overcoming obstacles hindering British firms entering Basra’s investment market. Fadhil pointed out, “We will work alongside the British Consulate to facilitate granting entry visas to British investors to enable them come and participate in the province’s economic growth.” Source: National Iraqi News Agency

Tunisia: Signs of economic recovery despite investment decrease

Foreign Direct Investments (FDI) reached 775.3 million Tunisian dinars (MTD) in the first half year of 2011 compared with 936.6 MTD in the same period of last year, down 17.2%. Despite this fall, the Foreign Investments Promotion Agency (FIPA) speaks about signs of recovery in the flow of FDI, compared with the 25% decrease recorded since the beginning of the year. The Tunisia Investment Forum held last June 16-17 in Tunisia had likely sent a positive signal to foreign businessmen who were taking wait-and-see attitude, according to statement from FIPA. These investments are shared out as follows: 734.5 MTD in FDI and 40.8 MTD in portfolio, compared with 826.6 MTD and 108 MTD, respectively, in the first half of last year. Sector-based analyses of the FDIs show a concentration on energy and manufacturing industries with values of 430 MTD and 196.8 MTD, respectively. Despite the decline in volume, FDIs helped create 6,128 new jobs in the first six months of the current year, compared with 5,932 in the same period last year. Source: Tunisian News Agency