RaboResearch - Economic Research

Column Dutch version

Outlook 2016: green surrounded by orange

In an international climate where so many indicators are orange, we should count our blessings for now that the Netherlands is set to be a green oasis both this year and next. Things have looked rather different in recent years.

Economic Comment

In oil, rebalancing is the key word

According to the World Energy Outlook of the International Energy Agency the oil sector is adjusting to the new reality after the sharp oil price shock of 2014. And that translates to low though increasing oil prices.

Country Report

Country Report Lebanon

Lebanon’s economy continues to show weak growth in 2014 (3%), being adversely effected by the conflict in Syria. But the banking sector remains healthy and Lebanon still has ample foreign reserves, which mitigates its otherwise high country risk.

Country Report

Country Report Jordan

Jordan’s economic situation is improving. GDP growth has picked up to 3.1% in 2014, driven by lower oil prices and growth in the tourism sector. The greatest risk is still that the conflicts in Syria and Iraq will lead to negative spill-overs.

Economic Report

Iran: dealing with the deal

Iran’s nuclear deal will be a clear plus for its economy and its trade partners. Globally, the economic impact is mainly through lower oil prices. Geopolitically, it might increase tensions within the Middle East as Iran becomes more powerful.

Country Report

Country Report Oman

Economic growth is expected to maintain its momentum in the medium term underpinned by strong domestic demand and economic diversification. However, the combination of high government spending and a decreased oil price puts pressure on fiscal sustainability.

Country Report

Country Report United Arab Emirates

Although the UAE’s economy is more diversified and less dependent on the oil sector than the surrounding Gulf States, it is strongly affected by the decreasing oil price since the second half of 2014.

Country Report

Country Report Egypt

Domestic stability in Egypt has improved markedly and the economy is showing timid signs of recovery. The government has engaged in bold reforms. Generous aid from the Gulf Cooperation Council (GCC) countries gives it the financial space to gradually implement those reforms.

Country Report

Country Report Israel

The Israeli economy is likely to continue to grow at a moderate pace, while the strong growth of mortgage debt and the rise of housing prices pose risks. Meanwhile, a new round of peace talks with the Palestinians is not obvious under a new government that is dominated by nationalists and ultra-Orthodox parties.

Country Report

Country Report Kuwait

The growth of Kuwait’s hydrocarbon dependent economy slowed further in 2014, as oil prices slumped. Stimulating development of the non-oil sector requires reforms that will be difficult to pass, especially if they come at a cost of welfare programmes. Meanwhile, the political situation eased somewhat as the current parliament is proving more cooperative.

Country Report

Country Report Bahrain

The oil price decline negatively affects economic growth and puts pressure on the fiscal position of Bahrain. Meanhile, Saudi Arabia is still (implicitly) backing the Sunni Al-Khalifa regime, both financially and militarily, in an effort to keep Iran at bay.

Country Report

Country Report Saudi Arabia

Economic growth has slowed down and government finances have deteriorated quickly as a result of lower oil prices. After his accession, King Salman has made major changes to the leadership that have consolidated power in the Sudairi clan.