Economy

January 2010
MENA Economic Report
 MENA feeling the impact of worldwide economic contraction
Though at different levels, the world economic crisis has negatively affected economies around
the globe. Some countries showed resilience to the problem, while others fell into deep
MENA Economies

recessions. As the year 2008 carried robust growth, coupled with unprecedented strength in
demand, resulting in price surges that put inflationary pressure on most of the world
economies, the year ended with severe dips in financial markets triggered by the American
subprime crisis.

In 2009, the world economy was confirmed to enter into the deepest recession since the Second
World War. Declining growth, if at all, credit constrains, diminishing demand and job losses are
the most apparent problems associated with the world recession in 2009.

The Middle East and North Africa (MENA) region is feeling the impact of the world recession
as well. The year 2009 came with unfavorable circumstances for this region, which was once at
odds from the international economy. Again, the effect of the crisis differed from a country to
another, depending on its economic conditions. Economies that are oil based were strongly hit
in their current accounts, as their trade balances depended on oil exports. The main problem is
with the oil prices peaking over US$140 per barrel, many of these economies built their future
budgetary spending in the coming years assuming the sustainability of such elevated worth per
barrel. These countries had to rearrange their expansionary budgets to match with plummeting
energy prices. Other countries, where services receipts are the main sources of national income,
have been hardly hit by the current stagnation of the world economy and are awaiting for any
signs of recovery. However, few countries showed real resilience to the recession and have
managed to optimize the current situation to get least affected by the world turmoil.

MENA GDP Growth

Country 2008 2009e 2010e Country 2008 2009e 2010e
Algeria 3.0% 2.1% 3.7% Oman 7.8% 4.1% 3.8%
Bahrain 6.3% 3.0% 3.7% Palestine 2.3% 5.5% 6.5%
Egypt 7.2% 4.7% 4.5% Qatar 16.4% 11.5% 18.5%
Iraq 9.8% 4.3% 5.8% Saudi Arabia 4.4% 0.2% 3.0%
Jordan 7.9% 3.0% 4.0% Sudan 6.8% 4.0% 5.5%
Kuwait 4.4% -1.5% 3.3% Syria 5.2% 3.0% 4.2%
Lebanon 8.5% 7.0% 4.0% Tunisia 4.6% 3.0% 4.0%
Libya 6.1% 1.8% 5.2% UAE 7.4% -0.2% 2.4%
Morocco 5.6% 5.0% 3.2% Yemen 4.7% 4.2% 7.3%
Source: IMF

 Saudi Arabian Tadawul Index up 27.5% in 2009

Faisal Hasan, CFA
Head of Research
fhasan@global.com.kw
Phone No:(965) 22951270
Mahmoud Soheim
Manager-Egypt Research
msoheim@globalinv.com.eg
Phone No: (202) 37609526
Ahmed Abu Hussein, CFA
Financial Analyst
aabuhussein@globalinv.com.eg
Phone No: (202) 37609526
Cherine Fayez Farkouh,
CFA
Financial Analyst
cfarkouh@globalinv.com.eg
Phone No: (202) 37609526
Unlike other equity markets in GCC, Saudi Arabian Tadawul Index went up by 27.5% in 2009
to 6122 as compared to 4803 at the end of 2008. Market capitalization to GDP propped back
close to its previous levels at 86.4% in 2009 as compared to 52.6% in 2008.
 UAE expected to undergo contraction
The UAE’s economy grew by 7.4% in 2008, in real terms, compared to 6.0% a year before. The
UAE financial markets were hardly hit aftermath the world financial turmoil. On the 25 th of
November 2009, the Dubai government shocked the world economies by announcing that it
was seeking a six-month moratorium on debt payments by flagship conglomerate Dubai
World.
 Kuwait has Largest outbound FDI in GCC
Kuwait has the largest FDI outflows and the lowest FDI inflows in the MENA region. In 2008,
FDI outflows reached US$5,521mn, while FDI inflows were minimal amounting to US$56mn,
as reported by UN’s World Investment Report 2009.

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 Economy
January 2010

 Qatar’s inflation was the highest in GCC in 2008

Among the GCC countries, Qatar’s inflation was the highest in 2008, reaching 15.2%,
primarily resulting from the rent and food prices. The inflation dropped drastically to negative
7.4% in the third quarter of 2009, with the ease of both the international food prices and the
local rent cost, which dropped severely with the current oversupply in the Qatari real estate
sector.
MENA Economies

 Egypt growing despite the negative effects of the world recession

The Egyptian economy, thanks for the reforms adopted since 2004, proved resilience amid the
world financial crisis. Though the IMF projected, in its World Economic Outlook that was
issued in April 2009, a real GDP growth for Egypt of 3.56% in 2008/09, the country has
recorded an actual 4.7%.

 Jordan public debt reached US$13bn

Jordan public debt reached as high as US$13bn and accordingly, the Jordanian government
decided to support the economic activity through adopting an expansionary monetary policy.
In late 2008, the Central Bank of Jordan reduced the key policy interest rate by 50bps and
reduced the required reserve ratio from 10% to 9%.

 Levant & North Africa to grow despite the financial crisis

Lebanon and Morocco are estimated to grow at a faster pace in 2009 as their GDP is expected
to grow by 7% & 5%, respectively, while the least growth would be of Libya and Algeria at
1.8% & 2.1%, respectively.

Zone 2

Zone 3
Zone 1

 Hereby, in this report, the economic effects of the world crisis on the MENA region are
highlighted. The effects on these economies in 2009 and beyond are illustrated by country. The
region was classified to three main zones to facilitate comparisons. Classification was based on
pure geographical grouping. The first zone North Africa and Sudan, the second zone the Levant
and Iraq and the third zone the GCC countries and Yemen.

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Contents

Zone 1: North Africa and Sudan ......................................................................................................................................................... 4

Algeria ................................................................................................................................................................................................. 4

Egypt ................................................................................................................................................................................................... 6

Libya.................................................................................................................................................................................................... 8

Morocco ...........................................................................................................................................................................................10

Tunisia ..............................................................................................................................................................................................12

Sudan ................................................................................................................................................................................................14

Zone 2: The Levant and Iraq .............................................................................................................................................................16

Jordan ...............................................................................................................................................................................................16

Lebanon............................................................................................................................................................................................18

Palestine (West Bank and Gaza Strip) ..........................................................................................................................................20

Syria ...................................................................................................................................................................................................22

Iraq ....................................................................................................................................................................................................24

Zone 3: GCC countries and Yemen ..................................................................................................................................................26

Bahrain..............................................................................................................................................................................................26

Kuwait ..............................................................................................................................................................................................28

Oman ................................................................................................................................................................................................30

Qatar .................................................................................................................................................................................................32

Saudi Arabia .....................................................................................................................................................................................34

The United Arab Emirates.............................................................................................................................................................36

Yemen...............................................................................................................................................................................................38

Statistical Appendix .............................................................................................................................................................................40

Real GDP Growth ..........................................................................................................................................................................41

Inflation Rate ...................................................................................................................................................................................42

Current Account (% of GDP).......................................................................................................................................................43

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Zone 1: North Africa and Sudan

Algeria

Algeria is among the top African countries holding
hydrocarbons reserves. An increase of 22.7% in its
hydrocarbons sector, which contributed to 45.6% of
nominal GDP, was the main reason behind the real GDP
growth of 3% in 2008. In addition, other sectors, including
agriculture, industries, construction and public works,
services and imports taxes and duties, which all combined
contributed to 54.4% of nominal GDP, grew by 27.8% in
the same year.
However, the current waning international demand,
resulting from the world financial turmoil, along with the
plummeting prices of oil and gas, compared to 2008, are
expected to lessen the real GDP growth in 2009, to around
2%. With the expectations of partial economic recovery in
the international markets by 2010, Algeria is expected to
realize an escalation of more than 3.5% in real terms, as
expected by the IMF.
Algeria real GDP growth as projected by the IMF
as the trade balance was deeply impeded, following a
slump in the Algerian exports. However, on a yearly basis,
the Balance of Payment witnessed an increase in the
overall surplus by 25.2% in 2008.
Over the 1st quarter of 2009, the overall balance
deteriorated further, as it dipped by 97.8% Q-o-Q,
triggered by a fall in the current account, which in turn was
affected by a plunge in the trade balance. Moreover, the
current account and overall Balance of Payment witnessed
deficits over the 9-months period ending September 2009.
It is worth noting that by October 2009, the Algerian
hydrocarbons exports plunged by over 45%, on yearly
basis, harmfully affecting the Trade Balance, especially that
the imports were almost stagnant.
The current account is expected to decline in 2009. Such
slip would occur given the lower demand in the
international markets, mainly Europe, and its effect on the
Country’s exports, along with the slump of hydrocarbons’
prices witnessed in 2009, compared to the hikes realized in
2008. Also, the remittances of the workers abroad are to
be negatively affected by the world recession, to further
depress the Country’s current account.

It is worth mentioning that the fact that Algeria reduced

considerably its external debt from US$17.2bn in 2005 to
US$5.6bn in 2006, helped alleviate the effects of the
international crisis. Otherwise, the Country would have
had to bear an additional unwanted burden during the
Source: Banque d’Algerie & the IMF.
financial crisis.
As for the government budget, public spending inclined in
Unemployment, which was estimated at 14.1% in 2008, is
2008, on the back of the 2005-2009 financial plan, aiming
on the rise in 2009, as a consequence of job losses, either
at supporting the economic growth, in addition to the
locally or abroad, as well as the inability of the government
reforms done in the public sector salaries. Nevertheless,
to create more jobs.
the ever high petroleum prices in 2008, which peaked
before the financial crisis, compensated for the increased
Algeria’s dependence on the oil and gas sectors remains a
expenditures and resulted in a hike of 83.0% in the overall
risk that should be mitigated in the years to come, in order
fiscal surplus.
to ensure sustainable economic growth.
As of 2009, the Algerian government imposed 15% tax
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rate on repatriated capital, as well as a 20% tax rate on
non-residents in the case of transfer of assets or company
shares. Although this can increase government revenues, it
is projected that the overall fiscal balance will witness a
deficit in 2009, for the first time in a decade. This is
attributed to the declining hydrocarbons’ prices, the main
contributor to the Country’s economy, in addition to the
increased public expenditures allocated to the 5-year
development plan, as well as the new plan for economic
recovery that should start from 2010.

Also, the effect of the financial crisis was plainly elucidated

in the last quarter of 2008, where the overall Balance of
Payment dropped by 60.2% on a quarterly basis, which Source: Banque d’Algerie
was mainly due to a decline in the current account surplus,

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Algeria
Economic Performance 2005 2006 2007 2008 Q2 2009
Macro Indicators
Nominal GDP (DZD bn) 7,544 8,461 9,306 11,008 -
Nominal GDP (US$ bn) 102.7 116.8 135.3 159.7 -
Nominal GDP Growth Rate (%) 22.9% 12.1% 10.0% 18.3% -
Real GDP (DZD bn)+ 5,231.1 5,335.7 5,495.8 5,660.6 -
Real GDP Growth Rate (%) 5.1% 2.0% 3.0% 3.0% -
Per capita GDP (US$) 3,126 3,482 3,997 4,645 -
Consumer Price Index (%) 1.6% 2.5% 3.5% 4.5% 4.9%
Population (mn) 32.9 33.6 33.9 34.4 -

Major contributor to GDP (%)

Hydrocarbon Sector 44% 46% 44% 46% -

Government Finance (DZD mn)^

Total Revenues and Grants*** 3,082,700 3,639,900 3,687,800 5,111,000 -
Total Expenditures (2,186,200) (2,488,800) (3,231,000) (4,275,100) -
Overall Fiscal Surplus/(Deficit) 896,500 1,151,100 456,800 835,900 -
Fiscal Balance % of GDP 11.9% 13.6% 4.9% 7.6% -

Balance of Payment (US$ mn)++

Trade Balance 26,470 34,060 34,240 40,600 1,140
Total Exports 46,330 54,740 60,590 78,590 20,330
Total Imports (19,860) (20,680) (26,350) (37,990) (19,190)
Services (net) (2,270) (2,200) (4,090) (7,590) (3,440)
Income (net) (5,080) (4,520) (1,830) (1,340) (610)
Transfers (Net) 2,060 1,610 2,220 2,780 1,290
Current Account 21,180 28,950 30,540 34,450 (1,620)
Current Account % of GDP 20.6% 24.8% 22.6% 21.6% -
Capital & Financial Account (4,240) (11,220) (990) 2,540 (20)
Overall balance 16,940 17,730 29,550 36,990 (1,640)

Money Supply (DZD mn)

Money Supply - M1 2,437,500 3,177,800 4,233,600 4,964,900 4,783,400
Quasi Money 1,632,900 1,649,800 1,761,000 1,991,000 2,094,100
Total Domestic Liquidity (M2) 4,070,400 4,827,600 5,994,600 6,955,900 6,877,500

Interest Rates
Discount Rate 4.0% 4.0% 4.0% 4.0% 4.0%
Deposit Rate 1.3%–2.5% 1.3%–2.5% 1.3%–2.5% - -
Lending Rate 5.5%–9.0% 5.5%–9.0% 5.5%–9.0% - -
Interbank Rate (Annual) 1.2% 1.1% 0.7% 0.4% 0.4%
Private Credit % of GDP 11.9% 12.5% 13.0% 12.8% -

Capital Market Indicators**

General Index+++
Market Capitalization (DZD bn) 5.4 6.8 6.4 6.5 6.6
Market Cap/GDP 0.1% 0.1% 0.1% 0.1% -
Total Volume of traded shares 13,487 76,010 130,443 185,695 148,565
Total Value of traded shares (DZD mn) 4 149 960 2,979 5,998

Exchange Rate
US$/DZD (average rate) 73.36 72.65 69.37 64.57 72.59
+Base year 2001
^Figures in 2008 are preliminary
***Excluding privatization receipts
++Figures in 2009 are preliminary
+++N.B. Algeria has not launched an index.
**Capital Market Indicators as of end of December 2009.
Source: Banque d’Algerie, IMF, UN Population Division, Bourse d’Alger and Global Research

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Egypt

After three consecutive years of a real GDP growth of
around 7%, the Egyptian economy gained momentum and
grew by 4.7% in 2008/09, despite the negative effects of
the world recession. The Egyptian economy, thanks for
the reforms adopted since 2004, proved resilience amid the
world financial crisis. Though the IMF projected, in its
World Economic Outlook that was issued in April 2009, a
real GDP growth for Egypt of 3.56% in 2008/09, the
country has recorded an actual 4.7%.
Egypt real GDP growth as projected by the IMF
During the financial crisis, the main challenges for the
Egyptian economy were unemployment and the rising
inflation.
At the end of 2008, the unemployment rate reached 8.4%,
down from 10.6% two years earlier. Lately, the
unemployment reached 9.2% and is expected to remain a
challenge confronting the Egyptian government.
The Central Bank of Egypt, the CBE, was successful in
lowering the inflation rate from its peak in August 2008,
where it reached 23.6%, through continuous amendments
of the corridor range (the overnight deposit and lending
rates at the CBE). This policy has done well in reducing
the inflation rate to 9% in August 2009. However, the
inflation rate has risen again to reach 13.2% in November
2009, on the back of surging food prices.

It is worthy to note that the CBE has professionally

monitored the USD inflows and outflows and prevented
any dollarization attempt. The result was a stable exchange
Source: CBE & IMF
rate for the Egyptian Pound against the US Dollar.
The main areas that were hit and that are still vulnerable to
Egypt’s trade balance deficit is still on the rise, mainly as
the world recession in the Egyptian economy were the
Europe, the primary trade partner for Egypt, still suffers
Suez Canal revenues, as the world trade traffic substantially
from waning demand. At the end of 2008/09, the
declined, the tourism receipts, the remittances of the
Egyptian exports fell by 14.3%, while the imports fell by
Egyptians working abroad and the net Foreign Direct
only 4.6%, compared to the year before. Also, the drop in
Investment, FDI.
the current account from positive to negative was a main
contributor in the overall Balance of Payment deficit,
It is believed that by 2010 the world trade would partially
which finished negative for the first time since June 2004.
pick up and some growth will be seen in the Suez Canal
revenues.
The Egyptian economy has safely passed 2009 and is on
the brink of successfully going through 2010. It is worthy
The same applies to the tourism, which is poised to pick
to note that in the first quarter of 2009/10, which ended in
up in 2010 and 2011. The Egyptian government expects
September, Egypt succeeded to grow by 4.9% in its real
that the tourism sector will fully recover from the negative
GDP.
consequences of the international financial crisis by the
third quarter of 2010. It is worth mentioning that the
Egypt has a fairly diversified economy, with growth
tourism receipts declined by 6.4% during the first nine
opportunities in most sectors. However, new job creation
months of 2009, compared to the same period the year
will be the government most challenging obstacle in the
before, as opposed to a drop of 17.0% in the first quarter
year to come.
of 2009 compared to the first quarter of 2008. The
Egyptian ministry of tourism expects the number of
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tourists visiting Egypt to drop by 4% by the end of
calendar year 2009, as opposed to a year earlier, reflecting a
very modest drop amid the world recession.

On the other hand the remittances of the Egyptians

abroad are to further drop in 2009/10, after declining by
9% in 2008/09, as the job cuts in the GCC countries,
where most of the Egyptian expats are employed, effects
are not fully present yet. This will exert more pressure on
the Egyptian economy, since the unemployment rate
would be on the rise.

The net FDI plunged by almost 39% between 2007/08 Source: CBE
and 2008/09, mainly affected by the fall of the American
inflows by half.

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Egypt
Economic Performance 2005/06 2006/07 2007/08 2008/09* Q1 2009/10
Macro Indicators
Nominal GDP (LE bn) 617.7 744.8 892.6 1,038.6 -
Nominal GDP (US$ bn) 107.5 130.3 161.9 188.4 -
Nominal GDP Growth Rate (%) 14.7% 20.6% 19.8% 16.4% -
Real GDP (LE bn) + 695.5 744.8 798.1 835.4 -
Real GDP Growth Rate (%) 6.8% 7.1% 7.2% 4.7% -
Per capita GDP (US$) 1,460.4 1,681.6 2,046.2 2,270.0 -
Consumer Price Index (%) 4.2% 11.0% 11.7% 16.2% 13.2%
Population (mn) 73.6 77.5 79.1 83.0 -

Major contributor to GDP (%)

Hydrocarbon Sector 16.3% 15.0% 16.2% 15.6% -

Government Finance (LE mn)

Total Revenues and Grants 151,266 180,215 221,404 274,809 -
Total Expenditures (201,652) (234,912) (282,526) (346,414) -
Overall Fiscal Surplus/(Deficit) (50,386) (54,697) (61,122) (71,605) -
Fiscal Balance % of GDP -8.2% -7.3% -6.8% -6.9% -

Balance of Payment (US$ mn)

Trade Balance (11,986) (16,291) (23,415) (25,173) -
Total Exports 18,455 22,018 29,356 25,169 -
Total Imports (30,441) (38,308) (52,771) (50,342) -
Services (net) 8,191 11,498 14,966 12,502 -
Income (net) -
Transfers (Net) 5,547 7,061 9,338 8,247 -
Current Account 1,752 2,269 888 (4,424) -
Current Account % of GDP 1.6% 1.7% 0.5% -2.3% -
Capital & Financial Account 3,511 853 7,558 1,381 -
Errors & Omissions (2,010) 2,160 (3,025) (335) -
Overall balance 3,253 5,282 5,420 (3,378) -

Money Supply (LE mn)

Money Supply - M1 109,274 131,290 170,579 182,991 192,759
Quasi Money 451,082 531,398 596,085 648,220 655,049
Total Domestic Liquidity (M2) 560,356 662,688 766,664 831,211 847,808

Interest Rates
CBE Discount Rate 9.0% 9.0% 10.0% 9.0% 8.5%
Lending Rate (less than one yr loans) 12.7% 12.6% 12.2% 12.4% 11.6%
3-months Deposit Rate 6.5% 6.0% 6.1% 7.0% 6.0%
3-months T-bills 8.8% 8.7% 7.0% 11.3% 9.6%
Private Credit % of GDP 43.2% 40.0% 37.5% 33.8% -

Capital Market Indicators **

EGX30 (Points) (Year 1998=1,000 Points) 6,973 10,550 4,596 6,209 -
Market Capitalization (LE bn) 534.0 768.3 473.6 500.0 -
Market Cap/GDP 86.4% 103.2% 53.1% 48.1% -
Total Volume of traded shares (mn) 9,081 15,091 25,556 36,600 -
Total Value of traded shares (LE mn) 286,740 363,047 529,624 448,200 -

Exchange Rate
US$/LE (average rate) 5.75 5.71 5.51 5.51 5.50
* Preliminary
+ Base year 2006/07
** Figures as of calendar yearend on December.
The 2009/10 figures are as of September 2009, except for the inflation, which is as of November 09.
Source: Central Bank of Egypt, Ministry of Finance, the Egyptian Exchange (EGX) and Global Research

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Libya
With oil and gas making up around 70% of the Country’s
nominal GDP and about 98% of exports, the Libyan
economy is highly dependent on hydrocarbons and lacks
diversification. The Country’s wealth is greatly tied to the
performance of the international hydrocarbons sector.
Despite the occurrence of the financial crisis, real GDP
rose by 6.1% in 2008, compared to 5.6%, a year before.
The main driver was the soaring prices of oil in 2008. In
addition, positive performance of other non-oil sectors
contributed to the rise of the economy, these include
construction and transportation.
Libya real GDP growth as projected by the IMF
Source: Central Bank of Libya & IMF
Being the main catalyst for growth, the plummeting oil
prices will harshly impact the Libyan economy in 2009,
slowing down its development, to bounce back in 2010
with the expected recovery of the world economies.
Government spending rose in 2008, on the back of the
increase in public investment. Yet, the fiscal budget
continued to witness a surplus in its overall balance, as
fiscal revenues outstripped expenditures, fueled by oil
revenues, which share of total revenues stood at
approximately 89%. Also, revenues were affected by taxes,
which in turn stemmed from developments of the private
sector.
The overall fiscal balance is expected to drop in 2009, as a
result of falling oil prices. Therefore, the Libyan
government will have to control its spending, to deal with
the declining hydrocarbons revenues. In the second
quarter of 2009, the overall fiscal balance reported a
deficit, as a result of the decline in revenues coupled with a
stagnation of expenditures. However, the year is expected
to end with a little surplus or a small deficit.
The increased public spending in 2008, parallel with
skyrocketing commodity prices, resulted in higher
inflation, reaching 10.4%, as opposed to 6.2% in 2007.
Consequently, the government decided to counteract
inflation, through reducing expenditures. The inflation rate
is forecasted to decline in 2009 to 5%.
The current account surplus inclined in 2008, to reach
around 42% of GDP, compared to 40% in the previous
year. This stemmed from a sound trade balance, which
Global - MENA Economies
ameliorated over the year, as a result of the surging oil
prices. Yet, as the main exports of Libya come from the
hydrocarbons sector, the current account surplus is
expected to be sternly impacted by the end of 2009.
This in turn will lead to a drop in the Balance of Payments
surplus in 2009 and 2010, as the all time high oil prices are
not expected to be reached in the foreseeable future.
The performance of the Libyan economy is essentially
influenced by the government investment, public
consumption and exports proceeds. Obviously, these are
all dependent again on the hydrocarbons sector.
Accordingly, the government realizes the importance of
diversification, to lessen reliance on the oil sector. One of
the attempts was the initiation of infrastructure projects. In
addition, several economic reforms were made, in the field
of privatization and external trade agreements.
Moreover, the stock market was launched in 2007, aiming
at improving the economic development, through
attracting local and foreign investments. A number of
initial public offerings (IPOs) are planned in 2010, on the
Libyan Stock Market. The Libyan government is going
through material changes in its regulatory capital market
authority to conform to the international norms, in order
to attract regional, as well as international investors into
the stock market in 2010. It is worth mentioning that there
are currently 10 listed companies on the Libyan Stock
Market.
The activation of the Libyan Stock Market is a move from
Libya towards integrating its economy in the international
economy.
To conclude, as a way to enhance the economic growth,
there are several efforts that need to be undertaken. These
include, adequate management of the oil wealth,
restructuring the economy, reducing public expenditure
and enhancing the business environment, through
developing the private sector.
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Source: Central Bank of Libya
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Libya
Economic Performance 2005 2006 2007 2008 Q2 2009
Macro Indicators
Nominal GDP (LYD bn) ** 66.5 80.7 89.3 105.7 -
Nominal GDP (US$ bn) 49.3 63.0 73.1 84.9 -
Nominal GDP Growth Rate (%) 38.1% 21.5% 10.6% 18.4% -
Real GDP (LYD bn) **+ 43.6 46.1 48.7 51.7 -
Real GDP Growth Rate (%) 9.9% 5.9% 5.6% 6.1% -
Per capita GDP (US$) 8,528 10,652 12,082 13,722 -
Consumer Price Index (%) 3.0% 1.4% 6.2% 10.4% 2.5%
Population (mn) 5.8 5.9 6.1 6.2 -

Major contributor to GDP (%)

Mining and Quarrying Sector (including oil and gas) 66.1% 68.9% 66.1% 66.9% -

Government Finance (LYD mn)

Total Revenues and Grants 37,106 47,088 53,366 72,741 18,299
Total Expenditures (21,343) (21,378) (30,883) (44,116) (21,218)
Overall Fiscal Surplus/(Deficit) 15,763 25,710 22,483 28,626 (2,919)
Fiscal Balance % of GDP 23.7% 31.8% 25.2% 27.1% -

Balance of Payment (LYD mn)***

Trade Balance - 35,878 36,878 49,962 -
Total Exports - 51,552 59,182 76,818 -
Total Imports - (15,674) (22,304) (26,856) -
Services (net) - (2,751) (3,225) (5,129) -
Income (net) - 1,506 2,541 727 -
Transfers (Net) - 435 (276) (1,290) -
Current Account - 35,068 35,919 44,270 -
Current Account % of GDP 38.9% 43.4% 40.2% 41.9% -
Capital & Financial Account - (7,529) (12,074) (26,088) -
Errors & Omissions - (1,819) (2,882) 343 -
Overall balance - 25,721 20,964 18,525 -

Money Supply (LYD mn)

Money Supply - M1 11,667 13,725 18,387 26,573 30,021
Quasi Money 3,323 3,978 6,420 10,578 10,918
Total Domestic Liquidity (M2) 14,990 17,702 24,807 37,151 40,939

Interest Rates
Discount Rate 4.0% 4.0% 4.0% 5.0% 4.0%
Private Credit % of GDP 4.7% 3.8% 3.6% 3.5% -

Capital Market Indicators

LSM Index Value - - - 797 1,043
Market Capitalization (LYD bn) - - - 0.9 2.9
Market Cap/GDP 0.0% 0.0% 0.0% 0.8% -
Total Volume of traded shares (000s) - - 4.9 1.6 2.7
Total Value of traded shares (LYD mn) - - 254.6 427.8 33.9

Exchange Rate
US$/LYD (average rate) 1.35 1.28 1.22 1.25 1.25
+Base year 2003
**Figures in 2007 and 2008 are preliminary
***Figures in 2008 are preliminary
All 2009 figures are as of Q2, except for the capital market indicators, which are as of September 2009.
Source: Central Bank of Libya, UN Population Division, Libyan Stock Market and Global Research

9
 

Morocco
The Moroccan economy is an export oriented economy,
tied to the European Union, where almost 66% of the
Country’s exports in 2008 headed.
The real growth rate of the economy reached 5.6% in
2008. As a result of the financial crisis, the real GDP is
expected to grow at 5% in 2009, a lower rate, yet still fairly
high. A good season for agricultural sector, triggered by
abundant rainfall, is one of the factors that are expected to
support economic growth. This is supported by the
performance of the economy over the first half of 2009, as
GDP grew by 5.4% Y-o-Y, showing an acceleration of the
agricultural sector by around 29% Y-o-Y. It is worth
mentioning that the government initiated the “Maroc
Vert” plan in 2008, to reform the agricultural sector.
Morocco real GDP growth as projected by the IMF
Source: Bank Al-Maghrib, & IMF
The effects of the international crisis are mostly associated
with the sectors that are related to the international
markets. These are exports, tourism, workers abroad
remittances and FDI.
The main pressure came from the current account balance,
which was hit severely, with a deficit of 5.4% of GDP, as
opposed to a deficit of 0.1% of GDP in 2007, as a result of
the acceleration of the trade deficit, mainly affected by the
high costs of imports, due to hiking international prices,
especially in the first half of 2008.
Current Account Balance as a % of GDP
Source: Bank Al-Maghrib, & IMF
The current account mainly deteriorated in the last quarter
of 2008, due to the deceleration of services and transfers.
Global - MENA Economies
On the other hand, the sluggish demand of the main
export market, Europe, was counterbalanced by lower
imports costs, due to plunging international prices, which
lessened the trade deficit in the last quarter of 2008,
compared to the third quarter.
It is projected that the current account deficit will remain
stagnant in 2009, at approximately 5.5% of GDP.
Although the trade deficit in the first quarter of 2009 was
kept lower than the last quarter of 2008, it rose again in the
second quarter, ending June 2009, influenced by the
European recession.
As for the tourism revenues and workers abroad
remittances inflows, they remained feeble, affecting net
services and transfers. As a result, the current account
balance, as well as the overall Balance of Payment, suffered
from deficits in Q2 2009.
The development plans initiated by the government in
various sectors should lessen the negative influence of the
financial crisis. The “Maroc Vert” plan should have a
positive effect on various aspects of the economy,
including creating jobs, developing exports, diminishing
food subsidies and encouraging investments. This in turn
is expected to ameliorate the economy’s development.
Moreover, Morocco plans to enhance the performance of
its stock market, which is considered the third largest stock
exchange in Africa, after Johannesburg and Egypt. Bourse
de Casablanca currently consists of 77 listed companies
and it plans to list 75 additional companies by 2015, in
addition to the inclusion of a derivatives market.
Since Morocco is not highly dependent on a single sector,
the economy has proved to be somehow resilient amid the
financial crisis and was not considerably impacted. It is
expected that once the European economy recovers, the
sectors that were mostly affected by the financial crisis, will
be those driving the economic growth.
M2 Development
Source: Bank Al-Maghrib
10
 Global - MENA Economies
 
Morocco
Economic Performance 2005 2006 2007 2008 Q3 2009
Macro Indicators
Nominal GDP (MAD bn) 527.7 577.3 616.3 689.8 -
Nominal GDP (US$ bn) 59.5 65.6 75.2 88.9 -
Nominal GDP Growth Rate (%) 4.5% 9.4% 6.7% 11.9% -
Real GDP (MAD bn)+ 500.5 539.4 554.0 584.9 -
Real GDP Growth Rate (%) 3.0% 7.8% 2.7% 5.6% -
Per capita GDP (US$) 1,952 2,128 2,409 2,812 -
Consumer Price Index (%) 1.0% 3.3% 2.0% 3.9% -
Population (mn) 30.5 30.9 31.2 31.6 -

Major contributor to GDP (%)

Services Sector 51.3% 50.2% 52.2% 49.4% -

Government Finance (MAD mn)

Total Revenues and Grants 132,223 147,105 171,707 203,172 148,358
Total Expenditures (160,751) (156,727) (167,219) (203,588) (139,246)
Overall Fiscal Surplus/(Deficit) (28,528) (9,622) 4,488 (416) 9,112
Fiscal Balance % of GDP -5.4% -1.7% 0.7% -0.1% -

Balance of Payment (MAD mn)^

Trade Balance (72,766) (85,653) (115,327) (148,347) (63,296)
Total Exports
Total Imports
Services (net) 37,764 46,770 55,179 48,783 16,221
Income (net) (2,737) (4,203) (3,320) (5,831) (2,752)
Transfers (Net) 47,760 55,508 62,897 68,028 25,811
Current Account 10,021 12,422 (571) (37,367) (24,016)
Current Account % of GDP 1.9% 2.2% -0.1% -5.4% -
Capital & Financial Account 14,516 15,697 16,636 27,283 14,468
Errors & Omissions (3,648) (4,486) 874 (1,371) (2,144)
Overall balance 20,889 23,633 16,939 (11,455) (11,693)

Money Supply (MAD mn)++

Money Supply - M1 316,577 371,287 447,587 481,526 492,350
Quasi Money 59,147 65,077 72,048 79,368 84,763
Total Domestic Liquidity (M2) 375,724 436,364 519,635 560,894 577,113

Interest Rates
Discount Rate 3.3% 3.3% 3.3% 3.5% 3.3%
Deposit Rate*** 3.5% 3.7% 3.7% 4.2% 3.5%
Lending Rate^ 13.0% 14.0% 14.2% 14.2% 14.4%
Private Credit % of GDP 48.8% 51.7% 61.8% 67.8% -

Capital Market Indicators**

MASI Value 5,539 9,479 12,695 10,984 10,444
Market Capitalization (MAD bn) 415.2 417.2 586.3 521.9 506.7
Market Cap/GDP 78.7% 72.3% 95.1% 75.7% -
Total Volume of traded shares (mn)^^ 64 135 118 159 154
Total Value of traded shares (MAD mn)^^ 11,720 43,625 92,323 80,894 37,461

Exchange Rate
US$/MAD (average rate) 9.21 8.44 7.78 8.31 8.22
+Base year 1998
^Figures in 2008 and 2009 are preliminary
***Represents the weighted average interest rates of time accounts, 6-months and 12-months fixed term bills
++Figures in Q3 2009 are preliminary
^Represents the maximum rate for a 6-months period
^^Represent Figures of the Central and the Blocks markets
All 2009 figures are as of Q3, except for the Balance of Payment figures, which are as of June 2009
**Capital Market Indicators as of end of December 2009.
Source: Bank Al-Maghrib, IMF, UN Population Division, Foreign Exchange Office, Bourse de Casablanca, Zawya and Global Research

11
 
 Global - MENA Economies
 
Tunisia

After realizing a growth rate of 6.3% in real GDP in 2007,
the Tunisian economy grew by 4.6% in 2008. The
declination of growth was primarily as a result of the surge
in the food and energy prices in the first half of 2008,
which was reflected in higher subsidies.
Tunisia real GDP growth as projected by the IMF
The deterioration in the trade balance was a result of
increasing imports at higher rate than exports. Costs of
imports were magnified by mounting international prices
all over the year, while exports were squeezed, due to the
lower demand from international markets, notably the
main export market, the European Union (EU), where
almost 80% of the Tunisian exports are oriented.

It is expected that the current deficit will ease slightly in

2009, to reach around 3.8% of GDP, as the lower priced
imports should lessen the trade deficit.

On the contrary, the overall Balance of Payment witnessed

a surplus in 2008, as the deficit in the current account was
offset by an acceleration of the capital account. This was a
result of improved FDI inflows, in response to the
government attempts to attract investments. It is worthy to
Source: Central Bank of Tunisia & IMF
note that Tunisia was successful in attracting investments
in the last few years, especially from the GCC countries.
However, the realized growth in the Tunisian economy in
However, the sustainability of the Gulf region investment
2008 was achieved mainly through household demand,
inflows in the coming years into the MENA region is
which is considered the main catalyst for growth, in
highly questionable, since the financial crisis left most of
addition to Foreign Direct Investments (FDI) inflows.
the GCC members in shortage of excess credit to be
invested abroad.
The main sectors that are expected to be greatly affected
by the international turmoil are tourism and textiles. The
Tunisia ranked 69th among 183 countries in 2010, in terms
growth in real GDP is believed to further decelerate in
of the ease of doing business, which is considered an
2009 to around 3%, and then to rebound in 2010, to reach
improved position, compared to the previous year, as it
4%, as per the IMF.
ranked 73rd. This explains the flow of investments to the
Country, though still the government confronts many
A fiscal deficit of around 1% of GDP was witnessed in
challenges, represented by necessary developments in the
2008, mainly due to increased current expenditures, in
private sector, to promote the business climate and further
response to the world crisis, as the government subsidies
enhance FDI inflows, in addition to the high
inclined, to compensate for increasing food and oil prices.
unemployment rate.
However, the government’s attempts to trim down its
It is believed that the open economy policy adopted by the
expenditures, along with the rise in tax revenues were
Tunisian government will bring benefits to the Country
behind the lower deficit in 2008, compared to 2007, where
once the global economies bounce back. Obviously, the
it reached 2.9% of GDP.
external trade sector suffered from the European
recession, especially that there is a free-trade agreement
Downsizing public expenditures in the current
between Tunisia and the EU on industrial products.
circumstances is somehow complicated, as it is perceived
Nevertheless, such policy is expected to provide the
as an important tool employed by the government to
Country with substantial paybacks in the recovery phase.
ensure social and financial security, especially with the high
rate of unemployment, which reached 14% in 2008.
M2 Development
Another impact of the financial crisis was illustrated in the
Country’s current account deficit, which accelerated in
2008 reaching 4.2% of GDP, compared to 2.6% a year
before.

The main factor behind the current account deficit was the
devastated trade deficit, which share of GDP rose from
8% in 2007 to 10% in 2008. It is worthy to note that the
net services and workers abroad remittances were positive
over the year but could not offset the effect of the
compressed trade balance.
Source: Central Bank of Tunisia

12
 
 Global - MENA Economies
 
Tunisia
Economic Performance 2005 2006 2007 2008 Q3 2009
Macro Indicators^
Nominal GDP (TND bn) 37.8 41.4 45.6 50.3 -
Nominal GDP (US$ bn) 29.1 31.1 35.6 40.8 -
Nominal GDP Growth Rate (%) 7.3% 9.6% 10.2% 10.3% -
Real GDP (TND bn)+ 21.4 22.5 24.0 25.1 -
Real GDP Growth Rate (%) 4.1% 5.3% 6.3% 4.6% -
Per capita GDP (US$) 2,947 3,120 3,537 4,016 -
Consumer Price Index (%) *** 2.0% 4.5% 3.1% 5.0% 3.5%
Population (mn) 9.9 10.0 10.1 10.2 -

Major contributor to GDP (%)

Manufacturing Sector 17.2% 16.9% 17.1% 17.9% -

Government Finance (TND mn)

Total Revenues and Grants 11,767 13,326 15,665 -
Total Expenditures (12,941) (14,659) (16,258) -
Overall Fiscal Surplus/(Deficit) - (1,174) (1,333) (593) -
Fiscal Balance % of GDP 0.0% -2.8% -2.9% -1.2% -

Balance of Payment (TND mn)^^

Trade Balance (2,547) (3,345) (3,685) (4,941) (2,920)
Total Exports
Total Imports
Services (net) 2,374 2,450 2,699 3,257 2,397
Income (net) (377) (123) (420) (675) (269)
Transfers (Net) 162 194 231 250 166
Current Account (388) (824) (1,175) (2,109) (627)
Current Account % of GDP -1.0% -2.0% -2.6% -4.2% -
Capital & Financial Account 1,640 3,648 2,105 4,022 2,783
Errors & Omissions (35) (50) (47) 140 -
Overall balance 1,216 2,773 883 2,053 2,157

Money Supply (TND mn)

Money Supply - M1 8,773 9,906 11,105 12,404 13,505
Quasi Money 11,896 13,236 15,146 17,722 19,575
Total Domestic Liquidity (M2) 20,669 23,142 26,251 30,126 33,080

Interest Rates
Lending Rate^^^ 5.2% 5.2% 5.5% 5.3% 4.7%
Private Credit % of GDP 64.3% 63.6% 63.5% 65.1% -

Capital Market Indicators**

TUNINDEX Value 1,615 2,331 2,614 2,892 4,292
Market Capitalization (TND bn) 3.8 5.6 6.2 8.2 12.0
Market Cap/GDP 10.0% 13.4% 13.5% 16.2% -
Total Volume of traded shares (mn) 32 48 63 133 178
Total Value of traded shares (TND bn) 556 660 762 1,727 1,675

Exchange Rate
US$/TND (average rate) 1.30 1.33 1.28 1.23 1.30
+Base year 1990
^Figures in 2007 and 2008 are preliminary
***Figures in 2008 are preliminary
^^Figures in Q3 2009 are preliminary
^^^Represents the weighted average interest rate on treasury bonds, with maturity of 52 weeks
All 2009 figures are as of Q3, except for the money supply figures, which are as of October 2009
**Capital Market Indicators as of end of December 2009.
Source: Central Bank of Tunisia, IMF, UN Population Division, Bourse de Tunis, Zawya and Global Research

13
 

Sudan
Though Sudan is one of the richest countries in terms of
natural resources in the MENA region, and its agricultural
output, if optimized, could be sufficient for the whole
region, the economic sanctions imposed on the country, as
well as the under-skilled labor force are among the factors
that hinders any considerable growth in the economy.
Since the discovery of oil in economic quantities, its
exports have been the true driver of the economy, which
grew by 10.2% and 6.8% in 2007 and 2008, respectively.
Sudanese Oil Production (in thousand barrels daily)
Source: BP statistical review of world energy 2009
The economy’s growth in the latest years was also driven
by FDI inflows, mainly in the petroleum sector, from
China, India, Malaysia and the Gulf Arab countries. It is
worthy to note that the economic sanctions has limited the
access on the American and Western European expertise
and technology, which in turn dampens the long term
efficiency, capacity, and profitability of the Sudanese oil
sector.
In addition, the private and public investments growth,
where the private share was concentrated in the
communication and transportation sectors, helped boost
the economy’s growth.
The IMF projected the real GDP to grow at around 4% in
2009, mainly influenced by the freefall of the oil prices
amid the world financial crisis. The 2010 projected growth
in real GDP is 5.5%, based on anticipations of partial
recovery for the world economy by then.
Sudan real GDP growth as projected by the IMF
Source: Bank of Sudan and IMF
Global - MENA Economies
FDI inflows to Sudan either from Asia or the GCC
countries are expected to drop in 2009, 2010 and could
partially rebound by 2011, not because of decline of
interest in Sudan as an investment destination, yet as a
result of a credit squeeze in these regions and around the
world.
The government finances were affected by the crisis,
though in a positive sense, as the 2008 fiscal deficit
narrowed, compared to the previous year, due to the rising
oil revenues. Alternatively, the deficit is expected to
increase by the end of 2009, as a result of tumbling oil
prices.
The same goes for the current account deficit, which
shrank, on the back of rising oil prices and a consequent
acceleration of the trade balance. The current account
deficit is expected to widen in 2009, as a consequence of a
deficit in the trade balance, as well as a drop in transfers
resulting from job losses for Sudanese expats working in
the GCC countries.
The hiking food and oil prices in 2008 led to higher
inflation, amounting to 14.3%, up from 8.0% in the
previous year. By the end of the third quarter of 2009, the
inflation rate retreated to 10.4% and is estimated to end
the year around this figure.
Several developments are needed to enhance the Sudanese
economy. The agricultural sector, which contributes for
more than 30% of GDP, lacks adequate technology,
infrastructure, again on the back of the economic
sanctions, and, above all, skilled workers. In addition, the
Country suffers from poverty, due to failure of use of
ample resources.
The current geopolitical tensions in the South of Sudan,
which led to the imposition of economic sanctions on the
Country, have a negative impact on the economy.
M2 Development
Source: Bank of Sudan
14
 Global - MENA Economies
 

Sudan
Economic Performance 2005 2006 2007 2008 Q1 2009
Macro Indicators
Nominal GDP (SDG bn) 66.7 79.0 93.8 121.3 -
Nominal GDP (US$ bn) 27.4 36.4 46.5 58.0 -
Nominal GDP Growth Rate (%) 19.3% 18.5% 18.7% 29.3% -
Real GDP (SDG bn)+ 18.9 21.0 23.1 24.7 -
Real GDP Growth Rate (%) 6.3% 11.3% 10.2% 6.8% -
Per capita GDP (US$) 708 920 1,151 1,403 -
Consumer Price Index (%) 8.5% 7.2% 8.0% 14.3% 10.4%
Population (mn) 38.7 39.5 40.4 41.3 -

Major contributor to GDP (%)

Agricultural Sector - 36.8% 35.3% - -

Government Finance (SDG mn)

Total Revenues and Grants 15,075 18,462 24,708 -
Total Expenditures (18,253) (20,971) (25,986) -
Overall Fiscal Surplus/(Deficit) - (3,178) (2,509) (1,278) -
Fiscal Balance % of GDP 0.0% -4.0% -2.7% -1.1% -

Balance of Payment (US$ mn)

Trade Balance - (1,448) 1,157 3,441 (1,001)
Total Exports 5,657 8,879 11,671 -
Total Imports (7,105) (7,722) (8,229) -
Services (net) (3,274) (2,554) (2,127) (841)
Income (net) (2,014) (2,253) (3,013) -
Transfers (Net) 2,014 382 385 -
Current Account - (4,722) (3,268) (1,314) (1,842)
Current Account % of GDP -11.1% -13.0% -7.0% -2.3%
Capital & Financial Account 4,611 2,925 1,466 1,284
Errors & Omissions (97) 61 (131) (233)
Overall balance - (209) (282) 21 (792)

Money Supply (SDG mn)

Money Supply - M1 8,130 10,524 11,375 13,637 14,129
Quasi Money 5,652 7,348 8,340 9,296 11,201
Total Domestic Liquidity (M2) 13,782 17,872 19,715 22,933 25,330

Interest Rates - - -  -  -

Capital Market Indicators

Index Value (Points) 3,259 2,973 2,962 2,746 2,363
Market Capitalization (SDG bn) 7.5 9.3 10.3 8.1 -
Market Cap/GDP 11.2% 11.8% 11.0% 6.7% -
Total Volume of traded shares (mn) 1,732 7,565 9,407 282 -
Total Value of traded shares (SDG mn) 1,217 2,068 1,800 1,879 -

Exchange Rate
US$/SDG (average rate) 25.00 22.73 1.95 2.04 2.36
+Base year 1981/1982
2009 figures are as of Q1, except for Money Supply figures, which are as of August 2009, the Consumer Price Index is as of September 2009 and the Index Value as of
December 31st, 2009.
Source: Bank of Sudan, IMF, Central Bureau of Statistics, UN Population Division, Khartoum Stock Exchange and Global Research

15
 

Zone 2: The Levant and Iraq
Jordan
The Jordanian economy witnessed a stable GDP growth
between 8% and 9% over the past 5 years. This growth
was mainly driven by the healthy performance in the
financial services and trade sectors, in addition to the
continuous inflows of FDI. The manufacturing sector is
the major contributor to the GDP, accounting for around
20% in 2008.
The improvements experienced in the Jordanian economy
resulted from the government implemented structural
reforms, which included trade liberalization, privatization
and tax reforms.
However, the slight decline of 1% in real GDP in 2008
relative to 2007 was attributable to the financial crisis,
which caused a recession in the global economy starting
from the last quarter of 2008. This was reflected in a
deceleration in Industrial Production Quantity Index from
3.2% in 2007 to 1.3% in 2008, negatively affecting the
manufacturing sector.
Jordan real GDP growth as projected by the IMF
Source: Central Bank of Jordan & IMF
Jordan fiscal deficit declined in 2008, on the back of the
removal of fuel subsidy in early 2008. The government
adopted an automatic price adjustment mechanism to fully
pass the change in oil prices, which soared in 2008. In
addition, higher grants and government debt played a
major role in containing the overall deficit at 2.2% of GDP
in 2008.
Moreover, the current account deficit declined notably by
17.3% in 2008. This improvement in the current account
position resulted from a remarkable 36% growth in
exports, in addition to the increase in tourism receipts by
36%, as well as higher workers’ remittances. It is worth
mentioning that the government adopted a plan to develop
tourism infrastructure, in order to increase tourism
receipts.
The slowdown in the global economy negatively affected
the Jordanian economy, resulting in a growth of 3% in real
GDP during the first 6 months of 2009, compared to 8.9%
over the same period a year earlier. The IMF forecasted
Global - MENA Economies
that Jordan will grow by 3% in 2009, followed by 4% in
2010.
The retreat in Jordan economic performance will result
from reduction in FDI inflows and lower exports and
workers’ remittances, as Jordanian workers lose their jobs,
especially in the GCC countries. Therefore, the current
account balance is expected to deteriorate, although
cheaper imports could mitigate some of the trade balance
deficit. Furthermore, fiscal balance is expected to improve
on the back of savings resulting from lower prices of
commodities.
The Jordanian government has limited room for fiscal
stimulus, as fiscal position is in deficit, with high level of
indebtedness. By the end of October 2009, the Jordan
public debt reached US$13bn. Accordingly, the Jordanian
government decided to support the economic activity
through adopting an expansionary monetary policy. In late
2008, the Central Bank of Jordan reduced the key policy
interest rate by 50bps and reduced the required reserve
ratio from 10% to 9%.
Lower fuel and food prices following the crisis softened
inflationary pressures to -0.8% in the first 9 months of
2009, after it reached 13.9% in 2008, for the first time
since 1990.
Jordan is expected to resume its good economic
performance, as the global economy improves. In addition,
a recovery in oil prices will benefit Jordan, as GCC
countries are the major destination for Jordanian workers
and exports and a primary source of FDI.
The main challenges to the Jordanian economy lie in
reducing high public debt, as well as financing the fiscal
and current account deficits.
M2 Development
Source: Central Bank of Jordan
16
 Global - MENA Economies
 

Jordan
Economic Performance 2005 2006 2007* 2008* Q3 2009
Macro Indicators
Nominal GDP (JD bn) 9.0 10.5 12.1 15.1 -
Nominal GDP (US$ bn) 12.6 14.8 17.0 21.2 -
Nominal GDP Growth Rate (%) 10.7% 17.5% 14.6% 24.9% -
Real GDP (JD bn) + 7.4 8.0 8.7 9.4 -
Real GDP Growth Rate (%) 8.1% 8.0% 8.9% 7.9% -
Per capita GDP (US$) 2,307 2,649 2,971 3,629 -
Consumer Price Index (%) 3.5% 6.3% 4.7% 13.9% -0.8%
Population (mn) 5.5 5.6 5.7 5.9 -

Major contributor to GDP (%)

Manufacturing Sector 18.2% 18.2% 19.5% 20.5%

Government Finance (JD mn)

Total Revenues and Grants 3,062 3,469 3,972 5,093 3,252
Total Expenditures (3,479) (3,860) (4,540) (5,431) (4,117)
Overall Fiscal Surplus/(Deficit) (417) (391) (569) (338) (865)
Fiscal Balance % of GDP -4.7% -3.7% -4.7% -2.2% -

Balance of Payment (JD mn)

Trade Balance (3,556) (3,585) (4,574) (5,117) (1,850)
Total Exports 3,050 3,690 4,064 5,523 2,314
Total Imports (6,606) (7,275) (8,638) (10,640) (4,163)
Services (net) (148) (45) (48) 215 89
Income (net) 290 412 572 675 274
Transfers (Net) 1,855 2,085 1,970 2,506 945
Current Account (1,559) (1,133) (2,080) (1,721) (541)
Current Account % of GDP -17.4% -10.8% -17.3% -11.4% -
Capital & Financial Account 983 1,174 1,159 722 (328)
Errors & Omissions 577 (41) 921 999 869
Overall balance - - - - -

Money Supply (JD mn)

Money Supply - M1 4,061 4,567 4,833 5,573 5,924
Quasi Money 8,303 9,543 10,774 12,731 13,631
Total Domestic Liquidity (M2) 12,364 14,110 15,607 18,304 19,555

Interest Rates
Weighted Average Interbank Rate 4.6% 6.5% 5.1% 4.6% 3.2%
Re-Discount Rate 6.5% 7.5% 7.0% 6.3% 5.3%
Interest Rate on Repurchase Agreements 7.5% 8.5% 6.8% 6.0% 5.0%
6-months T-bills 6.6% 6.7% 0.0% 5.6% 3.2%
Lending Rate 8.1% 8.6% 8.9% 9.9% 9.2%
Private Credit as % of GDP 82.1% 88.4% 88.9% 82.5% -

Capital Market Indicators **

ASE General Free Float Weighted Index 4,260 3,014 3,675 2,758 2,534
Market Capitalization (JD bn) 26.7 21.1 29.2 25.4 22.6
Market Cap/GDP 297.8% 200.3% 242.3% 168.7% -
Total Volume of traded shares (mn) 2,583 4,104 4,479 5,442 6,000
Total Value of traded shares (JD mn) 16,871 14,210 12,348 20,318 9,700

Exchange Rate
US$/JD (average rate) 0.71 0.71 0.71 0.71 0.71
* Preliminary
+ Base Year 1994
**The Capital Market Indicators are as of end of December 2009.
Source: Central Bank of Jordan, Jordan Ministry of Finance, Amman Stock Exchange and Global Research

17
 

Lebanon
Lebanon recorded a healthy real GDP growth of 8.5% in
2008, as opposed to 7.5% in 2007. The Lebanese economy
is a service-oriented one, where the services sector has
always accounted for around 66% of the total economy.
Lebanon real GDP growth as projected by the IMF
Source: Banque Du Liban & IMF
Lebanon counter attacked the negative consequences of
the world financial crisis by focusing on monetary policy,
as its fiscal balance is heavily burdened by public debt and
subsidies to the electricity sector. The Central bank of
Lebanon adopted some measures including, reducing
reserve requirements on deposits and facilitating lending
through offering subsidized facilities.
Tax revenue represents the major source of the
government’s revenues, accounting for around 68% of the
total fiscal revenue. In order to be able to serve the
government debt and finance the electricity sector, the
government planned a tax reform to increase VAT from
10% to 15% to generate more fiscal revenues.
Privatization of public companies could be a major tool to
lower public debt and improve the fiscal balance.
The declining commodities prices post the crisis will help
to lower import payments, leading to improvement in the
trade balance. In addition, tourism receipts is expected to
increase, as tourists arrivals increased by 32.6% during the
first 6 months of 2009, compared to the same period of
2008.
In addition, the workers’ abroad remittances will be
negatively affected due to job losses, resulting from the
economic slowdown.
The current account position is expected to improve, as
the positive effect of the increase in goods and services
balance will outweigh the decrease in current transfers.
FDI inflows to Lebanon reached US$3.6bn in 2008,
compared to US$2.7bn in 2007, as reported by the United
Nation World Investment Report-2009. Nevertheless, the
world economic slowdown will negatively affect the
inflows of FDI in 2009.
Global - MENA Economies
Consequently, the Lebanese economy is expected to
record a slower growth rate of 7% in 2009, compared to
2008, and further down to 4% in 2010. However, this
growth is considered one of the highest in the MENA
economies.
It is worth mentioning that the negative effects of the
internal political tensions in Lebanon were much deeper
than the world financial crisis, and this was clear as when
the Doha Agreement was signed, it created a stable
political environment, which stimulated economic growth
in 2008.
The Doha Agreement reached among the conflicting
parties in May 2008, ended with forming the national unity
government to put an end to a year and half of political
tension and violence in Lebanon.
Lebanon has limited room for stimulus plans. Currently,
the main challenges to Lebanon are to maintain a stable
political front, in addition to reforming the electricity
sector, as it represents a major burden on the government
budget, accounting for 55% of the budget deficit in 2008.
Also, encouraging the domestic private investment became
crucial at the moment.
It is worth mentioning that in 2009 the Central Bank of
Lebanon has declared plans to avoid squeeze on lending to
the economy, through subsidized loans in local currency
and by reducing reserves requirements on deposits in local
currency, in order to direct the surplus liquidity to lending
to the economy.
Furthermore, the Central Bank of Lebanon tries to reduce
the outstanding level of public debt, as gross domestic
debt reached 160% of GDP in 2008 and its interest
payments absorbs almost 45% of the government
revenues.
However, the new government formation in Lebanon in
November 2009 might carry positive implications on the
Country’s economy, yet sure on its political stability.
M2 Development
Source: Banque Du Liban
18
 Global - MENA Economies
 

Lebanon
Economic Performance 2005 2006 2007 2008 Q2 2009
Macro Indicators
Nominal GDP (LL bn) 32,955 33,826 37,758 44,245 -
Nominal GDP (US$ bn) 21.9 22.4 25.0 29.3 -
Nominal GDP Growth Rate (%) 1.8% 2.6% 11.6% 17.2% -
Real GDP (LL bn) + 4,862.4 4,890.6 5,257.4 5,704.2 -
Real GDP Growth Rate (%) 2.5% 0.6% 7.5% 8.5% -
Per capita GDP (US$) 6,039.8 6,108.3 6,662.9 7,707.4 -
Consumer Price Index (%) -2.6% 5.6% 9.3% 5.5% -
Population (mn) 3.6 3.7 3.8 3.8 -

Major contributor to GDP (%)

Services Sector 67% 67% 66% - -

Government Finance (LL mn)

Total Revenues and Grants 7,372,524 7,315,926 8,749,030 10,552,801 8,759,980
Total Expenditures (10,169,906) (11,879,475) (12,587,131) (14,956,796) (9,137,956)
Overall Fiscal Surplus/(Deficit) (2,797,382) (4,563,549) (3,838,101) (4,403,995) (377,976)
Fiscal Balance % of GDP -8.5% -13.5% -10.2% -10.0%

Balance of Payment^ (LL mn)

Trade Balance (9,930,958) (9,270,371) (11,847,443) (16,899,980) (9,260,136)
Total Exports 3,997,136 4,816,915 6,131,606 7,682,823 2,544,435
Total Imports (13,928,094) (14,087,286) (17,979,048) (24,582,803) (11,804,571)
Services (net) 4,467,476 4,289,893 4,547,374 8,342,053 -
Income (net) (280,998) 276,777 1,115,701 (115,927) -
Transfers (Net) 1,602,020 2,968,871 4,166,278 4,067,084 -
Current Account (4,142,459) (1,734,831) (2,018,090) (4,606,769) -
Current Account % of GDP -12.6% -5.1% -5.3% -10.4% -
Capital & Financial Account 5,062,788 5,930,505 10,632,247 7,569,911 -
Errors & Omissions (920,329) (4,195,674) (8,614,157) (2,963,142) -
Overall balance - - - - -

Money Supply (LL mn)

Money Supply - M1 2,952,094 3,321,725 3,578,115 4,269,286 4,738,876
Quasi Money 21,512,410 20,155,550 21,252,550 33,055,430 42,845,770
Total Domestic Liquidity (M2) 24,464,504 23,477,275 24,830,665 37,324,716 47,584,646

Interest Rates
Interbank rate 3.8% 3.8% 4.0% 4.0% 3.3%
Weighted Average Discount & Lending Rate 10.1% 10.4% 10.1% 10.0% 9.2%
Weighted Average Deposit Rate 7.7% 7.5% 7.4% 7.2% 6.9%
3-months T-bills 5.2% 5.2% 5.2% 5.1% 4.9%
Private Credit as % of GDP 68.5% 70.5% 73.5% 75.7% -

Capital Market Indicators**

BDL Value Weighted Index (Points) (Jan
174 142 262 155 -
1996=1,000 Points)
Market Capitalization (LL bn) 7,412 12,518 16,423 14,485 18,101
Market Cap/GDP 22.5% 37.0% 43.5% 32.7% -
Total Volume of traded shares (mn) 90 135 114 106 49
Total Value of traded shares (LL mn) 1,392,056 3,063,067 1,498,149 2,578,450 1,296,265

Exchange Rate
US$/LL (average rate) 1,507.5 1,507.5 1,507.5 1,507.5 1,507.5
+ Base year 1990
^ 2008 figures are preliminary
2009 figures are as of Q2, except for Money Supply, Interest Rates sections are as of Q3.
** Capital Market Indicators are as of end of December 2009.
Source: Banque Du Liban, Ministry of Finance, Ministry of Economy &Trade, Beirut Stock Exchange and Global Research

19
 
 Global - MENA Economies
 
Palestine (West Bank and Gaza Strip)

Though the world financial turmoil and the international
recession that followed have negatively impacted
economies around the world, its impact has been limited
to a great extent, if not beneficial, on the Palestinian
economy in 2009.
The Palestinian territories being divided into different
terrains, West Bank and Gaza Strip, with different political,
social and economic conditions, is considered a challenge
in itself. The political and economic siege on Gaza Strip
since the end of 2008 has negatively impacted the whole
Palestinian economy more than the world recession.
The inflation rate in Gaza Strip surged from 1.6% in 2007
to 16.3% in 2008, compared to 0.8% and 9.8% in 2007 and
2008, respectively, in the West Bank, reflecting the impact
of the blockade, together with the surge in the
international food and petroleum prices. It is worth noting
that the general inflation rate for Palestine in 2008 reached
9.9%, as opposed to 1.9% a year before.
As per the IMF, the inflation in the Gaza Strip eased to
3% and to negative 1% in the West Bank in mid 2009, on
the back of the drop in the food and fuel prices
internationally. Again the effect of the siege on Gaza is
clear.
However, the rising rate of unemployment on the back of
the Gaza blockade remains one of the greatest challenges
for the Palestinian economy. The unemployment rate
reached 40.6% in 2008 in Gaza Strip, while in the West
Bank it reached 19.0%, pushing the aggregate
unemployment rate for the Palestinian economy to 26.0%
in 2008 from 21.5% a year before.
The fiscal balance surplus has improved between 2007 and
2008, thanks to the international grants, which supports
the Palestinian Authority and the developmental projects.
In 2009, regardless of the world recession, the
international grants to Palestine are not expected to drop,
as the decision is not economic, yet political.
The Palestinian economy, though in improvement, is
subject to the progress in the peace process with Israel.
The security conditions improved in the West Bank but
the case in Gaza is far from stable.
The economic prospects on the Palestinian territories will
not be clear, at least on the short term, without substantial
improvements in the security situation.
M2 Development

The aggregate Palestinian’s real GDP grew by 2.3% in

2008, after dropping by 1.2% in 2007. The GDP growth
was triggered by the growth in Services sector, the main
contributor to the GDP, accounting for more than 60% in
2008. The 2009 GDP is expected to grow by 5.5%,
followed by 6.5% in 2010.

Palestine real GDP growth as projected by the IMF

Source: Palestine Monetary Authority

Source: Palestine Monetary Authority& IMF

The Balance of Payments improved between 2007 and

2008 to report a surplus of US$534mn, increasing more
than four folds. The surge in the BOP surplus resulted
mainly from the 40% rise in the net transfers account.

The fact that Palestine is a net importer has protected its

current account from the world recession, as the exports
have always represented a small amount, when compared
to the imports. This in turn has limited the effects of the
world economic turmoil on the Palestinian economy.
Actually, the dips witnessed in the food and fuel prices
throughout 2009 have indirectly been beneficial on
Palestine’s current account so far.

20
 
 Global - MENA Economies
 
Palestine (West Bank and Gaza Strip)
Economic Performance 2005 2006 2007 2008 Q3 2009
Macro Indicators

Nominal GDP (US$ bn) 4.5 4.6 5.2 6.5 -

Nominal GDP Growth Rate (%) 9.8% 3.1% 12.8% 24.6% -
Real GDP (US$ bn) + 4.2 4.0 4.0 4.0 -
Real GDP Growth Rate (%) 6.0% -4.8% -1.2% 2.3% -
Per capita GDP (US$) 1,199.2 1,108.8 1,063.9 1,057.6 -
Consumer Price Index (%) 4.1% 3.8% 1.9% 9.9% 1.8%
Population (mn) 3.5 3.6 3.7 3.8 -

Major contributor to GDP (%)

Services Sector 65.0% 61.8% 62.1% 62.0% -

Government Finance (US$ mn)

Total Revenues and Grants 2,006 1,741 2,938 3,733 2,437
Total Expenditures (2,281) (1,707) (2,877) (3,463) (2,301)
Overall Fiscal Surplus/(Deficit) (275) 34 61 270 136
Fiscal Balance % of GDP -6.1% 0.7% 1.2% 4.2% -

Balance of Payment (US$ mn)

Trade Balance (2,749) (2,701) (2,717) (3,503) -
Total Exports 423 380 418 610 -
Total Imports (3,172) (3,081) (3,135) (4,113) -
Services (net) (261) (239) (286) (291) -
Income (net) 539 535 760 798 -
Transfers (Net) 1,469 2,040 2,253 3,152 -
Current Account (1,002) (365) 10 156 -
Current Account % of GDP -22.4% -7.9% 0.2% 2.4% -
Capital & Financial Account 1,028 391 81 378 -
Errors & Omissions - - - - -
Overall balance 26 26 91 534 -

Money Supply (US$ mn)

Money Supply - M1 1,325 1,330 1,633 1,804 -
Quasi Money 2,308 2,507 3,007 3,447 -
Total Domestic Liquidity (M2) 3,634 3,837 4,640 5,251 -

Interest Rates ^
US$ Deposit Rate 2.2% 3.0% 3.0% 0.8% 0.5%
US$ Lending Rate 7.3% 7.8% 8.0% 7.5% 6.7%
Jordanian Dinar Deposit Rate 1.8% 2.7% 3.5% 2.0% 2.0%
Jordanian Dinar Lending Rate 8.9% 9.1% 9.2% 9.0% 8.4%
New Israeli Shekel (NIS) Deposit Rate 2.0% 2.5% 2.5% 1.0% 0.2%
New Israeli Shekel (NIS) Lending Rate 13.5% 13.2% 12.7% 12.0% 11.7%
Private Credit as % of GDP 26.7% 29.5% 24.7% 20.0% -

Capital Market Indicators**

Al-Quds Index 1,129 605 527 442 493
Market Capitalization (US$ bn) 4.5 2.7 2.5 2.1 2.4
Market Cap/GDP 99.5% 59.1% 47.6% 32.7%
Total Volume of traded shares (mn) 370 223 299 339 239
Total Value of traded shares (US$ mn) 2,096 1,067 814 1,185 500

Exchange Rate^

+ Base Year 2004

^ Palestine Monetary Authority (PMA) does not have a national currency, thus the interest rates on deposits and loans are based on the main currencies that circulate in Palestine,
the US Dollar, Jordanian Dinar and New Israeli Shekel (NIS).
**Capital Market Indicators as of end of December 2009.
Source: Palestine Monetary Authority (PMA), Palestine Stock Exchange and Global Research

21
 

Syria
The fact that the financial system in Syria is strictly
regulated has protected the Country from the losses and
volatility experienced in the international credit markets by
mid 2008. The Syrian economy achieved a real growth rate
of 4.2% in 2007, whereas 2008 real GDP grew to record a
growth of 5.2%.
Syria real GDP growth as projected by the IMF
Source: IMF
The extractions and manufacturing sector, which include
the oil sector, is the main contributor to the Syrian
economy. The agriculture sector, which used to be the
highest contributor to GDP, comes second. They both
account for more than 50% of the Syrian economy.
The oil sector represents an important source of revenue
to the Syrian government. However, Syria’s declining oil
production led to a deceleration in the contribution of oil-
related revenues to the overall fiscal revenue. The share of
oil revenue to total government’s revenue decreased from
50.2% in 2003 to 21.7% in 2007.
Syrian Oil Production (in thousand barrels daily)
Source: BP statistical review of world energy 2009
In addition, the decreasing export volumes of oil, resulting
from the decrease in oil production, coupled with the
increase in local demand, led to a decline in oil export
proceeds, which in turn affected the trade and current
account balances negatively.
Looking forward to 2009, the drop in oil prices post the
crisis will put Syria’s fiscal budget under pressure, as oil
revenue will decline. In addition, the current account
balance will deteriorate, on the back of declining export
proceeds, lower tourism receipts and reduction in
Global - MENA Economies
remittances, as Syrian workers lose their jobs abroad,
mainly in the GCC countries, due to the economic
downturn. Also, the FDI inflows, which mainly came from
the Gulf States and were mostly directed to the real estate
projects, are to negatively affect the current account.
Accordingly, Syria’s GDP growth is expected to lose its
momentum gained in the last years to report 3.0% in 2009,
ameliorating in 2010 to 4.2%.
Over the past years, the Syrian government implemented
several economic reforms, with the purpose of
transforming the economy from government controlled
economy to a market-based one, through encouraging
private sector participation, foreign investment, in addition
to expanding the economy to reduce dependency on oil.
These reforms included tax reforms, lifting subsidy on
gasoline and diesel, opening private banks and establishing
Damascus Stock Exchange, which started operation in
March 2009.
The economic reforms adopted by the Syrian government
yielded its fruits, where FDI inflows improved remarkably
to reach US$2.1bn in 2008, compared to US$1.2bn in
2007, as reported by United Nation World Investment
Report-2009. However, the world economic slowdown
adversely impacted these inflows in 2009.
Continuation of reform policies to liberalize the economy
and reducing dependency on oil revenue, as well as
strengthening the real and the financial sectors, are the
major challenges confronting the Syrian government to
maintain a positive growth outlook on the long-term. Also,
the rising unemployment rate, amid the world recession, is
as equal challenge facing Syria in 2010.
As a matter of fact, the scarcity of economic information is
one of the main drawbacks in the Syrian economy and is
hindering its openness on the world economy. Until the
issuance of this report, Syria did not issue most of its
economic data for 2008.
M2 Development
Source: Central Bank of Syria
22
 Global - MENA Economies
 
Syria
Economic Performance 2005 2006 2007 2008 2009
Macro Indicators
Nominal GDP (SP bn) 1,490.8 1,708.7 2,025.0 2,560.0 -
Nominal GDP (US$ bn) 27.9 32.9 40.5 55.1 -
Nominal GDP Growth Rate (%) 18.0% 14.6% 18.5% 26.4% -
Real GDP (SP bn) + 1,134.9 1,192.7 1,243.3 1,307.3 -
Real GDP Growth Rate (%) 4.5% 5.1% 4.2% 5.2% -
Per capita GDP (US$) 1,532.3 1,745.1 2,081.9 2,769.5 -
Consumer Price Index (%) 7.4% 10.3% 4.2% 15.2% -
Population (mn) 18.3 18.7 19.4 19.9 -

Major contributor to GDP (%)

Manufacturing and Mining Sector (including oil and gas) 28% 32% 32% - -

Government Finance (SP mn)

Total Revenues and Grants 356,290 434,865 458,830 - -
Total Expenditures (431,402) (493,700) (520,531) - -
Overall Fiscal Surplus/(Deficit) (75,112) (58,835) (61,701) - -
Fiscal Balance % of GDP -5.0% -3.4% -3.0% - -

Balance of Payment (SP mn)

Trade Balance (7,453) 45,308 (26,028) - -
Total Exports 454,591 524,001 587,079 - -
Total Imports (462,043) (478,693) (613,107) - -
Services (net) 29,189 20,599 42,378 - -
Income (net) (45,644) (47,837) (34,424) - -
Transfers (Net) 39,689 28,909 40,976 - -
Current Account 15,782 46,979 22,902 - -
Current Account % of GDP 1.1% 2.7% 1.1% - -
Capital & Financial Account (7,187) (51,657) (11,696) - -
Overall balance 8,573 (4,678) 11,212 - -

Money Supply (SP mn)

Money Supply - M1 610,859 697,700 687,438 731,669 -
Quasi Money 462,691 502,992 623,256 740,940 -
Total Domestic Liquidity (M2) 1,073,550 1,200,692 1,310,694 1,472,608 -

Interest Rates
Weighted average Lending Rate (less than one yr loans) - 9.5% 9.7% 9.7% -
Weighted average 3-months Deposit Rate 7.6% 7.5% 5.8% -
Private Credit as % of GDP 14.9% 14.9% 15.1% 15.2% -

Capital Market Indicators**

Audi Damascus Price Index (Points) - - - - 177
Market Capitalization (SP bn) - - - - 61
Market Cap/GDP 0.0% 0.0% 0.0% 0.0%
Total Volume of traded shares (mn) - - - - 2
Total Value of traded shares (SP mn) - - - - 1,663

Exchange Rate
US$/SP (average rate) 53.4 52.0 50.0 46.5 45.8
+Base year 2000
**The Capital Market Indicators statistics are from the inauguration of the Syrian stock exchange on the 10th of March 2009 until the end of December 2009.
Source: Central Bank of Syria, IMF, Central Bureau of Statistics and Global Research

23
 

Iraq
Despite the anticipated increases in Iraqi oil production
and export volumes over the coming two years, the drop
in oil prices has negatively affected Iraq’s real GDP
growth, which amounted to 9.8% in 2008. The IMF
projected Iraq’s real GDP growth in 2009 at 4.3% and to
partially rebound back in 2010 to 5.8%.
Another major contributor in the expected drop in the
Country’s real GDP growth is the severe drought that hit
the Country’s agricultural crops, leading to a decline in
Iraq’s agricultural production.
Iraq real GDP growth as projected by the IMF
Source: IMF
Preliminary figures for 2008 indicated a surplus in the
overall fiscal balance, mainly coming from an increase in
international petroleum prices, as well as a rise in tax
revenues between 2007 and 2008.
The surplus is threatened to drop to 2006 levels by the end
of 2009, mainly on the back of plunges in international oil
prices. The Iraqi government announced that in case the
international oil prices stay low, it will cut its total
expenditure in order to contain the overall fiscal balance to
0% of GDP.
The current account surplus consequently will drop
considerably, mainly due to the oil exports value
declination. It is worth noting that oil exports constituted
97.1% of Iraq’s total exports in 2008. However, the drop
in commodities prices around the globe might ease the
expected drop in the current account balance, through
lower value of imports.
Current Account as % of GDP
Source: Central Bank of Iraq & IMF
Global - MENA Economies
By 2010, the current account balance is anticipated to
partially bounce back, though still reporting a deficit. The
rebound in the oil prices will definitely play the major role
in lessening the current account deficit.
The Central Bank of Iraq has successfully managed to
appreciate the Iraqi Dinar against the US Dollar by 3.7%
between 2007 and 2008, despite the world economic woes.
Under the current circumstances, Iraq needs to work on
job creation for thousands of unemployed work force,
through the encouragement and support of the private
sector to lead the growth.
Working on improving governance, as well as the
management of the Country’s resources, human, natural
and financial, is on top of priorities of the Iraqi
government, in order to re-engage its economy in the
world economy.
Iraq will also need to attract FDI inflows in order to
sustain its developmental plans over the coming period. In
addition, the Country needs to increase the shares of all
sectors in the GDP, in order to lower the dependence on
oil, which contributes to about two thirds of the Country’s
GDP.
Finally, the security situation in Iraq is the core issue
affecting its short term economic prospects.
M2 Development
Source: Central Bank of Iraq
24
 Global - MENA Economies
 
Iraq
Economic Performance 2005 2006 2007 2008* Q3 2009
Macro Indicators
Nominal GDP (ID bn) 73,533.0 95,588.0 111,504.0 155,636.0 -
Nominal GDP (US$ bn) 49.9 68.7 91.6 132.8 -
Nominal GDP Growth Rate (%) 38.1% 30.0% 16.7% 39.6% -
Real GDP (ID bn) + 43.0 47.5 48.2 52.9 -
Real GDP Growth Rate (%) 2.4% 10.5% 1.5% 9.8% -
Per capita GDP (US$) 1,124.3 1,713.8 2,108.7 3,007.0 -
Consumer Price Index (%) 31.6% 64.8% 4.7% 6.8% -2.7%
Population (mn) 27.9 28.8 29.6 30.4 -

Major contributor to GDP (%)

Hydrocarbon Sector 63.9% - - - -

Government Finance (ID mn)

Total Revenues and Grants 40,502,890 49,055,545 54,599,451 80,252,182 -
Total Expenditures (26,375,175) (38,806,679) (39,031,232) (59,403,375) -
Overall Fiscal Surplus/(Deficit) 14,127,715 10,248,866 15,568,219 20,848,807 -
Fiscal Balance % of GDP 19.2% 10.7% 14.0% 13.4% -

Balance of Payment (US$ mn)

Trade Balance 3,695 11,822 22,965 33,555 -
Total Exports 23,697 30,529 39,587 63,726 -
Total Imports (20,002) (18,708) (16,623) (30,171) -
Services (net) (5,739) (5,164) (4,004) (5,258) -
Income (net) 502 896 1,483 6,979 -
Transfers (Net) 3,236 (459) (381) (2,932) -
Current Account 1,694 7,095 20,063 32,344 -
Current Account % of GDP 3.4% 10.3% 21.9% 24.4% -
Capital & Financial Account (2,283) (7,100) (15,941) (21,148) -
Errors & Omissions 5,890 4 (4,121) (11,197) -
Overall balance 5,301 (0) - - -

Money Supply (ID mn)

Money Supply - M1 11,399 15,460 21,721 28,190 35,282
Quasi Money 3,285 5,620 5,235 6,730 7,810
Total Domestic Liquidity (M2) 14,684 21,080 26,956 34,920 43,092

Interest Rates
Discount Rate 7.0% 16.0% 20.0% 15.0% 7.0%
Rates on 91 day auctions (period average ) 8.9% 16.0% 21.0% 15.5% 5.5%
ID Bank deposits (one year fixed) 7.1% 7.7% 12.3% 10.1% 8.2%
FX Bank deposits (one year fixed) 3.7% 4.2% 4.7% 4.3% 4.1%
ID Bank loans ( 1+ - 5 year) 14.0% 15.7% 21.8% 18.0% 14.2%
FX Bank loans (1+ - 5 year ) 10.9% 11.9% 16.4% 16.4% 14.8%
Private Credit % of GDP 1.3% 2.0% 2.1% 2.6% -

Capital Market Indicators

General Index 45.6 25.3 34.6 58.4 252
Market Capitalization (ID bn) 3,160 1,949 2,129 2,283 2,855
Market Cap/GDP 4.3% 2.0% 1.9% 1.5% -
Total Volume of traded shares (mn) 55,639 57,975 152,991 150,853 105,092
Total Value of traded shares (ID mn) 366,810 146,891 427,367 301,350 225,473

Exchange Rate
US$/ID (average rate) 1,474 1,391 1,217 1,172 1,170
*Preliminary
+ Base year 1988
All the 2009 figures are as of Q3 2009, except the Capital Market Indicators are as of June 2009.
Source: Central Bank of Iraq, Ministry of Finance, Iraq Stock Exchange, COSIT, IMF and Global Research

25
 

Zone 3: GCC countries and Yemen
Bahrain
Similar to all GCC countries, Bahrain’s economy relies on
oil as its main source of wealth. The oil sector accounted
for almost 29% of GDP in 2008. Another main
contributor to GDP is the financial sector, which
accounted for more than one-fourth of GDP.
Bahrain real GDP growth as projected by the IMF
Source: Central Bank of Bahrain and IMF
As these two sectors were the most hardly hit by the world
financial turmoil, their drop in the last quarter of 2008
affected the Country’s real GDP escalation, lowering it to
6.3%, as opposed to 8.4% in 2007. However, the realized
growth was a result of the hiking oil prices prior to the
crisis.
The fall in oil prices and the slump of the financial sector
amid the world crisis are expected to further decelerate real
GDP growth, which is projected to grow by 3.0% in 2009
and 3.7% in 2010.
The main segments in the Bahraini economy that were
distorted are the exports and government revenues, both
relying on hydrocarbons, in addition to the receipts from
Bahraini foreign portfolio investments, as well as the
transfers outflows of expatriates working in Bahrain, on
the back of job losses after the financial crisis.
Current Account as % of GDP
Source: Central Bank of Bahrain and IMF
Exports, 80% of which belong to the oil and gas sector,
contributed to the acceleration of the trade balance in
2008, which stemmed from skyrocketing oil prices in the
first half of 2008. This compensated for the increase in
imports costs. However, the current account surplus
Global - MENA Economies
declined from 15.7% of GDP in 2007 to 10.3% in 2008,
mainly triggered by a drop in investment income, in
addition to an acceleration of expatriates’ transfers’
outflows.
The lethargy of world economies and its effect on
international trade, along with the falling oil prices in 2009
are believed to dampen the Bahraini exports. Also,
investment income is expected to shrink over the year,
further dropping the current account balance. As per the
IMF projections, the current account surplus is expected
to reach 3.7% of GDP in 2009 and 6.2% of GDP in 2010.
As for the government finances, soaring oil prices prior to
the crisis resulted in a surge of fiscal revenues and a
notable fiscal surplus, reaching 7.5% of GDP, compared to
0.6% in 2007, taking into consideration that revenues from
hydrocarbons captured more than 85% of the total
governmental revenues in 2008.
The high dependence on oil as the main source of
government revenues, coupled with the government
expansionary plan to bolster the economic growth and
counterbalance the effects of the world crisis, are
forecasted to result in a plunge of the fiscal balance in
2009.
Reliance on the oil sector, as well as the financial sector
represents challenges to the Bahraini government.
Therefore, efforts should be undertaken towards
diversifying both the economy and the government
sources of revenue.
The government also should enhance the role of the
private sector in the economy, which could be done
through privatization.
M2 Development
Source: Central Bank of Bahrain
26
 Global - MENA Economies
 

Bahrain
Economic Performance 2005 2006 2007 2008* Q3 2009
Macro Indicators
Nominal GDP (BD bn) 5.1 6.0 6.9 8.2 -
Nominal GDP (US$ bn) 13.5 15.9 18.5 21.9 -
Nominal GDP Growth Rate (%) 19.8% 17.8% 16.5% 18.6% -
Real GDP (BD bn) + 3.9 4.1 4.5 4.7 -
Real GDP Growth Rate (%) 7.9% 6.7% 8.4% 6.3% -
Per capita GDP (US$) 15,143 16,505 17,774 20,668 -
Consumer Price Index (%) 2.6% 2.1% 3.3% 3.5% 2.4%
Population (mn) 0.9 1.0 1.0 1.1 -

Major contributor to GDP (%)

Hydrocarbon Sector 25.0% 26.0% 24.6% 28.5% -

Government Finance (BD mn)

Total Revenues and Grants 1,671 1,840 2,037 2,678 -
Total Expenditures (1,414) (1,698) (1,994) (2,060) -
Overall Fiscal Surplus/(Deficit) 257 142 43 617 -
Fiscal Balance % of GDP 5.1% 2.4% 0.6% 7.5% -

Balance of Payment (BD mn)

Trade Balance 556 897 1,077 1,220 -
Total Exports 3,891 4,640 5,185 6,577 -
Total Imports (3,335) (3,743) (4,108) (5,357) -
Services (net) 614 646 686 643 -
Income (net) (460) (576) (558) (667) -
Transfers (Net) (155) (145) (112) (347) -
Current Account 554 823 1,093 849 -
Current Account % of GDP 11.0% 13.8% 15.7% 10.3% -
Capital & Financial Account (611) (827) (1,097) (837) -
Errors & Omissions 56 4 4 (11) -
Overall balance - - - - -

Money Supply (BD mn)

Money Supply - M1 1,063 1,286 1,573 1,899 2,058
Quasi Money 2,450 2,749 4,110 4,830 4,672
Total Domestic Liquidity (M2) 3,513 4,035 5,683 6,728 6,729

Interest Rates
3-Months Inter‐bank Rate (BHIBOR) 4.5% 5.3% 4.9% 2.4% 0.4%
CBB Key Policy Rate - 4.5% 4.0% 0.8% 0.5%
3-months T-bills - 4.9% 4.0% 2.8% 0.8%
Commercial Bank Lending Rate - Business Loans 7.2% 8.0% 6.9% 7.4% 6.8%
Commercial Bank Deposit Rate 3-12 months 3.7% 4.4% 3.5% 1.3% 1.7%
Private Credit as % of GDP 47.8% 48.2% 56.5% 68.1% -

Capital Market Indicators**

Global Bahraini Stocks Index 172 169 214 142 117
Bahrain All Share Index 2,196 2,218 2,755 1,084 1,458
Market Capitalization (BD bn) 6.5 8.0 10.2 7.5 6.4
Market Cap/GDP 153.9% 158.1% 171.1% 108.0% -
Total Volume of traded shares (mn) 458 728 851 1,676 852
Total Value of traded shares (BD mn) 268 523 403 787 178

Exchange Rate
US$/BD (average rate) 0.38 0.38 0.38 0.38 0.38
* Preliminary
+ Base Year 2001
**Capital Market Indicators as of end of December 2009.
Source: Central Bank of Bahrain, Bahrain Ministry of Finance, IMF, Bahrain Stock Exchange and Global Research

27
 

Kuwait
Kuwait economy continued its good performance in 2008,
achieving a real growth rate of 4.4% The Kuwait economy
is heavily dependent on the oil sector, where it represented
62.7% of GDP in 2008.
Kuwait real GDP growth as projected by the IMF
Source: Central Bank of Kuwait & IMF
The hiking oil prices during the majority of 2008 resulted
in a significant improvement of 48.5% in the Country’s
fiscal balance, as the oil sector generated 94.4% of the
Country’s fiscal revenue and achieved a remarkable growth
of 44%, boosting the overall fiscal revenue by
approximately 42%.
In addition, the current account balance grew by 30.8%
and improved as a percentage of GDP, reaching 43.7% in
2008. The 2008 surge in oil prices, which fueled export
proceeds by a respectable 31.5%, enhanced trade balance
position remarkably by 39.5%.
Unlike most of the countries in the MENA region, as well
as countries around the world, which adopted an
expansionary budget to support their economies after the
emergence of the global financial crisis, Kuwait adopted a
contractionary budget for 2009/10 by reducing
expenditures to keep the budget surplus.
On the contrary, the Central Bank of Kuwait adopted an
expansionary monetary policy to support the economy and
the financial system through cutting discount and
interbank rates, injecting liquidity and providing new
interbank lending windows.
Kuwait stimulus plan was concentrated on the financial
sector by enabling local banks to lend KD4bn (US$13.8bn)
within 2 years, with the government guaranteeing up to
50% of the total value to encourage lending and assist
troubled local investment companies to repay their debts.
Kuwait economy will be negatively affected by the fall in
oil prices, especially without the existence of a proper
stimulus plan in place. Therefore, Kuwait GDP is
Global - MENA Economies
forecasted to shrink by negative 1.5% in 2009, according
to the IMF.
The decline in oil prices will harshly hit the hydrocarbons
export proceeds, leading to a significant drop in trade
balance, which in turn will cause a retreat in current
account balance. In addition, fiscal balance will deteriorate,
on the back of the decline in oil-related revenues.
Inflationary pressures were relieved after the drop
witnessed in commodities prices. Inflation rate softened to
3.4% in the second quarter of 2009, after peaking to 11.6%
in August 2008.
Kuwait has the largest FDI outflows and the lowest FDI
inflows in the MENA region. In 2008, FDI outflows
reached US$5,521mn, while FDI inflows were minimal
amounting to US$56mn, as reported by United Nation
World Investment Report 2009. However, the government
decision to cut tax rate on foreign companies from 55% to
15% should attract the inflow of foreign capital into
Kuwait.
The Kuwaiti economy is more vulnerable to the negative
consequences of the financial crisis than other GCC
economies because besides its heavy dependence on the oil
sector, most of the oil proceeds were invested in financial
ventures that were severely hit in the crisis.
Also, the Dubai World crisis will definitely affect Kuwaiti
banks, which will have to allocate additional provisions to
cover expected defaults from other Dubai debtors. In turn,
the banks’ profitability and capacity to lend will contract.
The non-existence of a fiscal stimulus plan would deepen
the negative impact of the crisis on the economy. The
main challenge facing Kuwait economy is to create a more
diversified economy to become less oil dependent in the
years to come.
M2 Development
Source: Central Bank of Kuwait
28
 Global - MENA Economies
 

Kuwait
Economic Performance 2005 2006 2007 2008 Q3 2009
Macro Indicators
Nominal GDP (KD bn) 23.6 29.5 32.6 39.8 -
Nominal GDP (US$ bn) 80.8 101.6 114.6 148.2 -
Nominal GDP Growth Rate (%) 34.7% 24.9% 10.6% 22.1% -
Real GDP (KD bn) + 17.1 18.0 18.8 19.6 -
Real GDP Growth Rate (%) 10.6% 5.2% 4.4% 4.4% -
Per capita GDP (US$) 27,012 31,911 33,705 43,049 -
Consumer Price Index (%) 4.1% 3.0% 5.5% 10.6% 3.9%
Population (mn) 3.0 3.2 3.4 3.4 -
Major contributor to GDP (%)
Hydrocarbon Sector 57.3% 59.9% 57.1% 63.5% -

Government Finance (KD mn)

Total Revenues and Grants 12,347 15,627 16,927 24,016 10,794
Total Expenditures (5,140) (6,810) (8,249) (11,128) (9,537)
Overall Fiscal Surplus/(Deficit) 7,207 8,817 8,679 12,889 1,257
Fiscal Balance % of GDP 30.5% 29.9% 26.6% 32.4% -

Balance of Payment (KD mn)

Trade Balance 8,832 11,668 12,337 17,205 -
Total Exports 13,228 16,381 17,770 23,372 -
Total Imports (4,396) (4,713) (5,433) (6,167) -
Services (net) (1,151) (637) (902) (972) -
Income (net) 2,097 3,182 3,522 2,720 -
Transfers (Net) (974) (1,033) (1,649) (1,550) -
Current Account 8,805 13,181 13,308 17,403 -
Current Account % of GDP 37.3% 44.7% 40.8% 43.7% -
Capital & Financial Account (9,359) (14,167) (10,457) (15,346) -
Errors & Omissions 719 2,025 (1,935) (1,886) -
Overall balance 165 1,039 916 171 -

Money Supply (KD mn)

Money Supply - M1 3,727 3,550 4,147 4,370 4,891
Quasi Money 9,359 12,370 14,813 17,580 19,835
Total Domestic Liquidity (M2) 13,086 15,921 18,960 21,950 24,726

Interest Rates
CBE Discount Rate 6.0% 6.3% 6.3% 3.8% 3.0%
Lending Rate (less than one yr loans) 7.5% 8.6% 8.5% 7.6% 5.7%
3-months Deposit Rate 2.9% 5.0% 5.0% 3.4% 1.4%
3-months T-bills 2.0% 0.0% 0.0% 0.0% 1.0%
3-months KIBOR (average) 2.9% 5.7% 5.0% 2.9% 1.4%
Private Credit as % of GDP 60.6% 58.0% 67.7% 64.5% -

Capital Market Indicators**

Global General Index (Kuwait) 320 291 378 206 186
General price Index (Points) (29/12/1993=1,000 Points) 11,445 10,067 12,559 7,783 6,987
Market Capitalization (KD bn) 37.4 30.6 37.0 20.7 30.2
Market Cap/GDP 158.5% 103.9% 113.5% 52.1%
Total Volume of traded shares (mn) 52,245 37,658 70,442 80,851 110,983
Total Value of traded shares (KD mn) 28,421 17,284 37,012 35,747 22,671

Exchange Rate
US$/KD (average rate) 0.29 0.29 0.28 0.27 0.29
+Base year 2000
The 2009 figures are as of Q3 2009, except the inflation is as of Q2 2009.
**Capital Market Indicators as of end of December 2009.
Source: Central Bank of Kuwait, Kuwait Stock Exchange and Global Research

29
 
 Global - MENA Economies
 
Oman

Leaps realized in the oil and gas prices in 2008, especially
in the first half of the year, were the main catalyst for the
heady progress witnessed in the Omani economy. The
hydrocarbons sector captured an overwhelming
contribution of 51.3% of GDP. Consequently, nominal
GDP accelerated considerably by 44.0% over the year,
while in real terms, the Sultanate’s economy progressed by
7.8%.
Oman real GDP growth as projected by the IMF
Source: Central Bank of Oman and IMF
The reverse direction taken by the international
hydrocarbons prices in 2009 is believed to trim down the
Omani real GDP growth, which is projected to attain 4.1%
in 2009 and 3.8% in 2010.
Hiking energy and commodities prices in 2008 posed
inflationary pressures on the Omani economy, where
inflation peaked to 12.4%, compared to 5.9% in 2007.
However, inflation has eased in 2009, to 1.2% in
September 2009, on the back of falling oil and
commodities prices, in addition to the efforts carried out
by the Central Bank of Oman to counteract inflation
throughout the year.
The world financial crisis affected various aspects of the
Omani economy. These include governmental finances,
tourism, investment income and remittances of expatriates
working in Oman. Although the overall fiscal balance and
the current account balance were able to sustain their
surpluses in 2008, these balances are expected to be
significantly impacted in 2009.
Like the fiscal budget, the current account surplus inclined
in 2008, reaching 9.1% of GDP, as opposed to 6.2%, a
year before. The main driver for such increase was the
trade balance, fueled by hydrocarbons exports.
Alternatively, net income, transfers and services were
negatively affected by the crisis, as dividend payments and
revenues from tourism were impeded by the crisis. In
addition, outflows of expatriates were magnified, on the
back of job losses.
The financial crisis is expected to depress the current
account balance even further in 2009. Proceeds from
petroleum exports, which constituted 76.0% of total
exports in 2008, will squeeze, following the drop of oil and
gas prices. In addition, the tourism revenues, which are
considered a vital component of the services sector, are
projected to be hardly affected by the crisis. Moreover, the
plunge of the financial sector will significantly impact the
investment income. It is worthy to note that the financial
turmoil influenced the capital and financial account, which
slumped significantly and led to a 70.8% drop in the
overall Balance of Payment in 2008.
The Omani banking sector might suffer from the Dubai
World crisis since its exposure to the Dubai conglomerate
amounts to approximately US$80mn.
In order to buttress the economic growth of Oman,
particularly throughout the international turmoil, the
Omani government should exert efforts towards
diversifying its sources of revenues and reduce the
Sultanate’s reliance on the hydrocarbons sector as its main
driver for development. Therefore, developments in non-
oil sectors should take place, privatization actions should
occur, as means for projects financing.
M2 Development

The government’s main source of revenue comes from

hydrocarbons, which constituted 79.1% of the total fiscal
revenues in 2008. Gains from the unprecedented hikes in
oil and gas prices pushed the fiscal surplus higher, which
more than doubled in 2008.
Source: Central Bank of Oman
On the other hand, decreasing hydrocarbons prices in
2009 threatens the overall fiscal balance, which could even
turn negative, especially with the implementation of the
government expansionary plan. It is worthy to note that
the Omani government decided to increase its spending, to
confront the effects of the financial meltdown. This could
be achieved through the use of accumulated oil and gas
revenues and net foreign assets.

30
 
 Global - MENA Economies
 

Oman
Economic Performance 2005 2006 2007 2008* Q3 2009
Macro Indicators
Nominal GDP (RO bn) 11.9 14.2 16.0 23.0 -
Nominal GDP (US$ bn) 30.9 36.8 41.6 59.9 -
Nominal GDP Growth Rate (%) 25.3% 19.1% 13.1% 44.0% -
Real GDP (RO bn) + 8.8 9.3 10.0 10.8 -
Real GDP Growth Rate (%) 4.9% 6.0% 7.7% 7.8% -
Per capita GDP (US$) 12,318 14,282 15,180 20,909 -
Consumer Price Index (%) 1.9% 3.5% 5.9% 12.4% 1.2%
Population (mn) 2.5 2.6 2.7 2.9 -

Major contributor to GDP (%)

Hydrocarbon Sector 49.4% 47.6% 45.2% 51.3% -

Government Finance (RO mn)

Total Revenues and Grants 4,511 4,980 5,921 7,639 4,828
Total Expenditures (4,372) (4,857) (5,903) (7,599) (4,779)
Overall Fiscal Surplus/(Deficit) 138 122 18 40 49
Fiscal Balance % of GDP 1.2% 0.9% 0.1% 0.2% -

Balance of Payment (RO mn)

Trade Balance 4,100 4,501 3,979 6,541 -
Total Exports 7,187 8,300 9,494 14,503 -
Total Imports (3,087) (3,799) (5,515) (7,962) -
Services (net) (848) (997) (1,248) (1,595) -
Income (net) (868) (1,072) (1,411) (1,992) -
Transfers (Net) (393) (256) (326) (851) -
Current Account 1,991 2,176 994 2,103 -
Current Account % of GDP 16.8% 15.4% 6.2% 9.1% -
Capital & Financial Account (597) 1,320 1,444 (1,145) -
Errors & Omissions (317) (7) (34) (256) -
Overall balance 1,077 3,489 2,404 702 -

Money Supply (RO mn)

Money Supply - M1 1,128 1,230 1,921 1,995 2,239
Quasi Money 2,445 3,232 4,199 5,538 5,427
Total Domestic Liquidity (M2) 3,573 4,461 6,120 7,533 7,666

Interest Rates
Overnight Domestic inter-bank rate 2.2% 3.4% 1.5% 0.3% 0.07%
Private Sector Time Deposits 3.2% 3.9% 4.1% 4.6% 4.4%
Private Sector Lending 7.2% 7.5% 7.3% 7.1% 7.5%
Private Credit as % of GDP 30.8% 31.1% 38.1% 38.0% -

Capital Market Indicators**

MSM 30 Index 4,875 5,582 9,035 5,441 6,369
Market Capitalization (RO bn) 5.9 6.2 10.3 7.9 9.1
Market Cap/GDP 49.5% 44.0% 64.2% 34.3% -
Total Volume of traded shares (mn) 512 1,110 3,422 4,441 6,092
Total Value of traded shares (RO mn) 1,407 1,343 2,663 3,663 2,285

Exchange Rate
US$/RO (average rate) 0.38 0.38 0.38 0.38 0.38
* Preliminary
+ Base Year 2000
**Capital Market Indicators as of end of December 2009.
Source: Central Bank of Oman, Oman Ministry of National Economy, IMF, Muscat Securities Market and Global Research

31
 

Qatar
Despite the double digit growth in Qatar’s GDP over the
last few years, the over dependence on the hydrocarbons
sector, which contributed to above 60% of the Country’s
GDP in 2008, is still a drawback in the Qatari economy.
Qatar real GDP growth as projected by the IMF
Source: Qatar Central Bank & IMF
In 2008, the real GDP grew by about 16.4%, supported by
surging oil prices by then. This buoyant growth is not
anticipated to be sustained in 2009 at the same level, since
the drop in oil prices has strongly hit most of the oil based
economies. The IMF expects an 11.5% growth in GDP in
2009, followed by a strong 18.5% in 2010.
Qatar’s 2010 growth comes mainly on the back of the new
liquefied natural gas (LNG) facilities that will come shortly
on stream. It is worth mentioning that Qatar is the largest
LNG exporter in the world.
GDP by Economic Activity at Current Prices 2008
Source: Qatar Central Bank “Quarterly Statistical Bulletin - June
09”
As the oil and gas represented about 88% of Qatari
exports in 2008 and with the plunges in the hydrocarbons
prices throughout 2009, the Country’s current account is
to be negatively affected. In addition, the forecasted
increase in the transfers of workers’ remittances, on the
back of job losses, will further deepen the current account
surplus deterioration. Consequently, the overall balance of
payment will be depressed in 2009. Amelioration is yet to
Global - MENA Economies
slightly appear in 2010, on the back of improvements in
the world economy.
Among the GCC countries, Qatar’s inflation was the
highest in 2008, reaching 15.2%, primarily resulting from
the rent and food prices. The inflation dropped drastically
to negative 7.4% in the third quarter of 2009, with the ease
of both the international food prices and the local rent
cost, which dropped severely with the current oversupply
in the Qatari real estate sector.
The expansion in luxurious housing and the development
of new cities and mega projects fever that hit many of the
GCC countries at the end of 2007 and the beginning of
2008 has caused severe depletion in liquidity in these
countries. Qatar, as a labor importing country, is currently
suffering huge oversupply in its real estate sector, on the
back of the world recession, which was a direct cause in
job losses, and expats left the country, leading to a free fall
in rent costs.
The international financial crisis hit Qatar in its financial
and investment sector the most. With the plummeting
indices around the region, huge losses were reported for
the investment firms, as well as the commercial banks.
The Qatari government announced that it will purchase
the investment and real estate portfolios of commercial
banks, to be financed from the proceeds of the
petrodollars accumulated over the last few years.
The exposure of the Qatari banks on the Dubai World
debt seems to be high enough to negatively affect their
balance sheets in 2010, on the back of the need for higher
provisions.
Qatar, as most of the GCC countries, needs to lessen its
dependence on the hydrocarbons sector, through more
diversification in its GDP composition.
M2 Development
Source: Qatar Central Bank
32
 Global - MENA Economies
 

Qatar
Economic Performance 2005 2006 2007 2008 Q3 2009
Macro Indicators
Nominal GDP (QR bn) 154.6 206.6 259.4 365.5 -
Nominal GDP (US$ bn) 42.5 56.8 71.3 100.4 -
Nominal GDP Growth Rate (%) 33.8% 33.7% 25.5% 40.9% -
Real GDP (QR bn) + 90.1 103.6 119.5 139.1 -
Real GDP Growth Rate (%) 9.2% 15.0% 15.3% 16.4% -
Per capita GDP (US$) 47,711 54,496 58,119 69,321 -
Consumer Price Index (%) 8.8% 11.8% 13.6% 15.2% -7.4%
Population (mn) 0.9 1.0 1.2 1.4 -

Major contributor to GDP (%)

Hydrocarbon Sector 59.6% 57.3% 56.5% 60.8%

2005/06 2006/07 2007/08 2008/09*

Government Finance (QR mn)
Total Revenues and Grants 65,685 86,063 117,850 136,278 -
Total Expenditures (50,768) (67,147) (84,900) (97,422) -
Overall Fiscal Surplus/(Deficit) 14,917 18,916 32,950 38,856 -
Fiscal Balance % of GDP 9.7% 9.2% 12.7% 10.6% -

2005 2006 2007 2008 Q3 2009

Balance of Payment (QR mn)
Trade Balance 60,781 70,034 80,793 108,388 -
Total Exports 93,773 123,945 152,951 199,880 -
Total Imports (32,992) (53,911) (72,158) (91,492) -
Services (net) (3,362) (10,059) (13,562) (13,819) -
Income (net) (20,805) (11,941) (15,430) (24,614) -
Transfers (Net) (9,380) (13,604) (13,779) (18,270) -
Current Account 27,234 34,430 38,022 51,685 -
Current Account % of GDP 17.6% 16.7% 14.7% 14.1% -
Capital & Financial Account (4,321) (20,339) 1,980 1,425 -
Errors & Omissions (6,594) 5,709 6,090 (9,697) -
Overall balance 16,319 19,800 46,092 43,413 -

Money Supply (QR mn)

Money Supply - M1 25,657 33,492 40,737 50,870 52,526
Quasi Money 53,244 76,681 112,999 133,136 156,198
Total Domestic Liquidity (M2) 78,901 110,173 153,735 184,005 208,724

Interest Rates
3 months Inter-Bank rate 4.5% 5.0% 5.8% 2.8% 2.5%
QCB Rate -Deposits 4.1% 5.1% 4.3% 4.1% 3.7%
QCB Rate -Loans 6.4% 7.3% 7.6% 6.2% 7.3%
Repo Rate 5.1 5.6% 5.6% 5.6% 5.6%
Private Credit as % of GDP 31.5% 35.4% 42.6% 43.8% -

Capital Market Indicators**

Global General Qatari Index (Points) 562
779 487 684 516
(base year 1999)
Qatar Exchange (QE) General Index 11,053 7,133 9,580 6,886 6,959
Market Capitalization (QR bn) 317.2 221.7 347.7 279.0 320
Market Cap/GDP 205.2% 107.3% 134.0% 76.3% -
Total Volume of traded shares (mn) 1,033 1,865 3,411 3,894 3,450
Total Value of traded shares (QR mn) 102,843 74,947 108,930 175,552 92,165
Exchange Rate
US$/QR (average rate) 3.64 3.64 3.64 3.64 3.64
*Preliminary
+ Base year 1988
**Capital Market Indicators as of end of December 2009.
Source: Qatar Central Bank, Doha Stock Exchange and Global Research

33
 

Saudi Arabia
Saudi Arabia is an oil-based economy, as the hydrocarbon
sector represented 60.3% of GDP in 2008. The Kingdom
of Saudi Arabia is the world’s largest oil producer and has
the largest proven oil reserves in the world. The
hydrocarbons sector contributed to 89.3% of Saudi Arabia
fiscal revenue and 87% of its total exports proceeds in
2008.
Saudi Arabia GDP recorded a growth rate of 22.1% in
nominal values, whereas in real terms it grew by 4.4% in
2008. The Kingdom’s real GDP is to Increase by 0.15% in
2009, and to rebound back to positive growth in 2010, by
3.0%.
Saudi Arabia real GDP growth projections
Source: Saudi Arabia Monetary Authority (SAMA) & the Central Department of
Statistics and Information
The surge experienced in oil prices during most of 2008
was the main reason behind this large divergence between
real and nominal growth. In nominal terms, the oil sector
inclined by 34.9% and the non-oil sector reported a growth
rate of 6.7%, while in real terms the oil and non-oil sectors
achieved a growth rate of 4.8% and 4.3%, respectively.
Despite the emergence of the global financial crisis in mid-
September 2008 and the declining oil prices thereafter, the
high petroleum products prices witnessed in 2008 fueled
the noteworthy growth in the Kingdom’s fiscal and trade
surpluses, growing by 229% and 49%, respectively.
In addition, the surge in oil prices, coupled with hiking
food prices globally, resulted in a high inflation rate,
reaching a peak of 11.1% in July 2008.
The slump in oil prices post the credit crunch caused a
significant draw back in the Kingdom’s economic
performance. In real terms, the oil sector is estimated to
shrink by 6.4%, whereas the non-oil sector is estimated to
increase by 3% in 2009.
The retreat of oil-related revenues will negatively affect
Saudi Arabia fiscal revenue, as Saudi Arabia expects total
revenue to decline by 54% in 2009. However, the
government will support the budget by using its
international reserves accumulated during the oil price
peak to support the economy.
Moreover, the trade balance will decrease on the back of
lower exports proceeds, mainly oil as well as non-oil,
Global - MENA Economies
leading to deterioration in the current account balance.
The current account surplus as percent of GDP is
estimated to drop from 28.6% in 2008 to 5.5% in 2009.
Inflation rate is expected to ease somewhere around the
4%, due to lower international oil and food prices,
declining rent costs, in addition to the stabilization of the
US dollar to which Saudi Riyal is pegged. As of November
2009, the inflation rate reached 4%.
On the other hand, the non-oil sector has also been
negatively affected by the world economic slowdown and
tight credit markets, but its vulnerability to the crisis will be
much lower than its direct effect on the oil economy.
Therefore, Saudi Arabia government announced a stimulus
package to mitigate the consequences of the financial
crisis, by announcing that it intends to spend US$400bn on
development projects over the coming five years to
support the level of investment in the economy, in order
to sustain the long-term growth potentials.
Saudi Arabia is the largest recipient of FDI inflows in the
MENA region, capturing around 40% of FDI inflows to
the MENA in 2008.
FDI inflows to Saudi Arabia reached US$38.2bn in 2008,
as per United Nation World Investment Report-2009. FDI
inflows are expected to decline, on the back of the global
liquidity squeeze and tight credit conditions.
Saudi Arabia government targets to diversify its economy
by increasing the contribution of non-oil sector to become
less oil-dependent.
The Kingdom is believed to have positive growth
prospects driven by the rebound of oil prices and planned
heavy spending on development and infrastructure
projects, as well as large local market with a sizeable
population base, in comparison to other GCC member
States, and the government plan to create a more
diversified economy.
M2 Development
Source: Saudi Arabia Monetary Authority (SAMA)
34
 Global - MENA Economies
 

Saudi Arabia
Economic Performance 2005 2006 2007 2008* 2009E^
Macro Indicators
Nominal GDP (SR bn) 1,182.5 1,335.6 1,439.5 1,758.0 1,384.4
Nominal GDP (US$ bn) 315.3 356.2 383.9 468.8 369.2
Nominal GDP Growth Rate (%) 26.0% 12.9% 7.8% 22.1% -21.3%
Real GDP (SR bn) + 762.3 786.3 812.4 848.5 849.8
Real GDP Growth Rate (%) 5.6% 3.2% 3.3% 4.4% 0.2%
Per capita GDP (US$) 13,645.0 15,040.3 15,836.2 18,895.6 14,538.0
Consumer Price Index (%) 0.7% 2.2% 4.1% 9.9% 4.4%
Population (mn) 23.1 23.7 24.2 24.8 25.4

Major contributor to GDP (%)

Hydrocarbon Sector 52.3% 54.0% 54.6% 60.3% 46.8%

Government Finance (SR mn)

Total Revenues and Grants 564,335 673,682 642,800 1,100,993 505,000
Total Expenditures (346,474) (393,322) (466,248) (520,069) (550,000)
Overall Fiscal Surplus/(Deficit) 217,861 280,360 176,552 580,924 (45,000)
Fiscal Balance % of GDP 18.4% 21.0% 12.3% 33.0% -3.3%

Balance of Payment (SR mn)

Trade Balance 472,571 551,979 564,869 794,973 390,300
Total Exports 677,144 791,338 874,403 1,175,424 691,600
Total Imports (204,573) (239,359) (309,534) (380,451) (301,300)
Services (net) (81,351) (132,494) (174,984) (243,607) -
Income (net) 1,618 14,362 23,970 37,603 -
Transfers (Net) (55,374) (62,844) (63,870) (86,294) -
Current Account 337,463 371,003 349,985 502,674 76,700
Current Account % of GDP 28.5% 27.8% 24.3% 28.6% 5.5%
Capital & Financial Account (213,202) (297,731) (292,124) (444,800) -
Errors & Omissions (124,261) (73,272) (57,862) (57,874) -
Overall balance - - - - -

Money Supply (SR mn)^^

Money Supply - M1 283,539 312,742 383,557 425,494 506,234
Quasi Money 165,266 226,027 283,059 367,624 342,007
Total Domestic Liquidity (M2) 448,805 538,769 666,616 793,118 848,240

Interest Rates
Repo Rate (end of period) 4.8% 5.2% 5.5% 2.5% 2.0%
Reserve Repo rate (end of period) 4.3% 4.7% 4.0% 1.5% 0.3%
3 months SIBOR (end of period) 5.0% 5.0% 4.0% 2.6% -
3-months SIBOR (average) 3.8% 5.0% 4.8% 2.9% 0.4%
Private Credit as % of GDP 51.2% 48.7% 51.8% 51.0% -

Capital Market Indicators**

TASI (Points) (Year 1999=1,000 Points) 16,713 7,933 11,039 4,803 6,122
Market Capitalization (SR bn) 2,438.0 1,226.0 1,946.0 924.0 1,196.0
Market Cap/GDP 206.2% 91.8% 135.2% 52.6% 86.4%
Total Volume of traded shares (mn) 12,281 68,515 57,829 58,727 57,338
Total Value of traded shares (SR mn) 4,138,695 5,261,851 2,557,712 1,962,945 1,264,011

Exchange Rate
US$/SR (average rate) 3.75 3.75 3.75 3.75 3.75
*Preliminary
^2009 figures are based on the Central Department of Statistics and Information KSA estimates.
+Base year 1999
^^2009 figures are actual as of November 2009
**Capital Market Indicators as of end of December 2009.
Source: Saudi Arabia Monetary Authority (SAMA), Saudi Arabia Stock Exchange and Global Research

35
 

The United Arab Emirates
The UAE’s economy grew by 7.4% in 2008, in real terms,
compared to 6.0% a year before. As the majority of the oil
based economies, the UAE will experience depressed
growth in its real GDP, as a direct result of the drop in oil
prices. The IMF estimates shrinkage by 0.2% in the UAE’s
real GDP in 2009, to rebound back to positive growth in
2010, by 2.4%.
UAE real GDP growth as projected by the IMF
Source: Central Bank of the United Arab Emirates & IMF
On the other hand, the inflation, which peaked to 12.3%
in 2008, is expected to drop to almost 1% in 2009, as a
direct result of the burst of the real estate bubble, mainly in
Dubai, as well as the drops witnessed in commodities’
prices internationally. It is worth mentioning that the
housing rents, which accounted for 39.3% of the
consumer prices basket in 2008, grew by 13.4% between
2007 and 2008.
The plunge of the oil price by the end of 2008 and
throughout 2009 has definitely affected the UAE’s current
account negatively. Oil and related products exports
represented about 42% of the UAE’s exports in 2008.
Tourism revenues are expected to fall sharply in 2009, as a
consequence of the world financial crisis. Also, the
estimated rise in the net transfers account, primarily the
outflows of workers’ remittances, on the back of
increasing level of job losses, will have an adverse effect on
the current account. Another contributor in the estimated
drop in the current account balance is the investment
income account, which is certainly to fall as an outcome of
the world financial crisis.
The UAE financial markets were hardly hit aftermath the
world financial turmoil. Both Abu Dhabi and Dubai stock
markets indices nose dived and market capitalizations were
slashed into halves.
On the 25th of November 2009, the Dubai government
shocked the world economies by announcing that it was
seeking a six-month moratorium on debt payments by
flagship conglomerate Dubai World, which total liabilities
amount to approximately US$60bn, of which US$26bn of
debt. It is worth mentioning that Nakheel, the real estate
arm of Dubai World, has a US$4.1bn worth sukuks that
were due for payments on the 14th of December, 2009.
Dubai, which was once unstoppable and wanted to
transform itself as a regional financial hub, a magnet to
tourists and expats, has now to pay the bills of the borrow
and build model of their own.
Global - MENA Economies
On the 28th of November 2009, Abu Dhabi, the oil rich
state of the UAE, declared in a shocking statement that it
will not bare all of Dubai’s debts, instead it will be selective
on where it will inject money and that Dubai owes Abu
Dhabi clarifications on various issues. However, on the
14th of December 2009, Dubai announced that it has
received from Abu Dhabi US$10bn in the form of 5-year
bonds with an annual interest rate of 4%. This amount
will help pay the US$4.1bn Nakheel sukuks and the rest
will help cover Dubai World’s interest repayments and
operating costs, until reaching a standstill agreement with
the lenders.
The complexity of the situation lies mainly in the ability of
Abu Dhabi, the oil rich emirate, to rescue the remaining
emirates, with the plummets witnessed in the oil prices.
However, the assets of the UAE’s sovereign wealth funds
provide an acceptable shelter for coping with losses in
projects around the Country, primarily in Dubai. The
losses on Dubai projects in 2009 are estimated to be
around US$25bn, about 10% of the UAE’s nominal GDP
in 2009, which is high, yet manageable.
It is worthy to note that the current problem is more a
consequence of the world property bubble burst rather
than the start of a new financial crisis. Also, the loss of
confidence in Dubai is compounded by the difficulty of
obtaining information. However, this loss of confidence
from international players toward Dubai will also impact
the whole Gulf region, which was once a safe haven for
international investors for its high investment returns.
The reliance on volatile sources of funding is the key
problem of the UAE’s economy. The rebound in the oil
price will positively affect its trade balance and as a
consequence, the current account balance is estimated to
return positive again. Nevertheless, the job market might
take a while to revive back in the UAE.
The ease of investment as well as the tax free environment
will be the key catalysts for a rebound in the UAE’s
economy through the coming years. Yet the most
important aspect for the recovery in the UAE’s economy
is the confidence rebuilding after the Dubai World debt
crisis, which effects might spillover the GCC member
States and beyond.
M2 Development
Source: Central Bank of the United Arab Emirates
36
 Global - MENA Economies
 
United Arab Emirates
Economic Performance 2005 2006 2007 2008* Q3 2009
Macro Indicators
Nominal GDP (AED bn) 506.8 643.5 758.0 934.3 -
Nominal GDP (US$ bn) 138.0 175.2 206.4 254.4 -
Nominal GDP Growth Rate (%) 30.7% 27.0% 17.8% 23.2% -
Real GDP (AED bn) 409.2 470.2 498.3 535.4 -
Real GDP Growth Rate (%) 16.8% 14.9% 6.0% 7.4% -
Per capita GDP (US$) 34,602 41,433 45,991 53,388 -
Consumer Price Index (%) 6.2% 9.3% 11.1% 12.3% -
Population (mn) 4.0 4.2 4.5 4.8 -

Major contributor to GDP (%)

Hydrocarbon Sector 36.0% 34.3% 33.5% 36.8% -

Government Finance (AED mn)

Total Revenues and Grants 203,700 299,000 333,400 - -
Total Expenditures (104,400) (127,700) (166,900) - -
Overall Fiscal Surplus/(Deficit) 99,300 171,300 166,500 - -
Fiscal Balance % of GDP 19.6% 26.6% 22.0% - -

Balance of Payment (AED mn)

Trade Balance 157,154 211,302 170,851 231,091 -
Total Exports 430,737 534,666 656,020 878,508 -
Total Imports (273,583) (323,364) (485,169) (647,417) -
Services (net) (53,559) (66,226) (95,359) (124,244) -
Income (net) 10,600 17,400 30,750 13,970 -
Transfers (Net) (24,701) (30,101) (34,111) (39,000) -
Current Account 89,494 132,375 72,131 81,817 -
Current Account % of GDP 17.7% 20.6% 9.5% 8.8% -
Capital & Financial Account (53,881) (58,987) 105,424 (203,061) -
Errors & Omissions (26,112) (49,503) 5,683 (51,240) -
Overall balance 9,501 23,885 183,238 (172,484) -

Money Supply (AED mn)

Money Supply - M1 104,449 120,019 181,664 208,138 221,100
Quasi Money 219,615 279,274 384,038 466,172 507,700
Total Domestic Liquidity (M2) 324,064 399,293 565,702 674,310 728,800

Interest Rates
3-month Inter Bank (Average) 3.6% 5.2% 5.1% 2.8% -
Private Credit as % of GDP 52.0% 53.7% 58.8% 67.5% -

Capital Market Indicators

UAE Stock Market Index 7,538 4,481 6,434 2,792 -
Market Capitalization (AED bn) 886 608 945 484 -
Market Cap/GDP 174.8% 94.5% 124.6% 51.8% -
Total Volume of traded shares (mn) 27,808 50,756 157,318 126,439 -
Total Value of traded shares (AED mn) 509,792 416,541 554,329 537,134 -

Exchange Rate
US$/AED (average rate) 3.67 3.67 3.67 3.67 3.67
*Preliminary
Source: Central Bank of the United Arab Emirates, Ministry of Economy, IMF and Global Research

37
 

Yemen
Yemen economy recorded a real GDP growth of 4.7% in
2008, compared to 4.4% in 2007. Though lower than the
GCC members, the hydrocarbon sector is the main
contributor to the Yemeni GDP, as it accounted for
around 29% of the nominal GDP in 2008. However,
wholesale and retail trade sector is considered the major
contributor to non-oil GDP with a share of 21% in 2008.
Yemen real GDP growth as projected by the IMF
Source: Central Bank of Yemen & IMF
Although the non-oil real GDP achieved a growth of 7.5%
in 2008, the oil sector achieved a negative growth of 8.1%,
on the back of the declining oil production, which worked
as a pull-back on the Yemeni economic performance. The
retreat in the oil sector performance is expected to
continue, as Yemen oil reserves are expected to be
depleted in 10 to 12 years.
Yemeni Oil Production (in thousand barrels daily)
Source: BP statistical review of world energy 2009
Yemen fiscal balance improved in 2008, where the 15%
decline in the budget deficit was driven by the 57.6%
increase in oil revenue, which came on the back of the
surge in oil prices during the first 3 quarters of 2008. The
hydrocarbon revenue captured 72.6% of the total fiscal
revenue. In addition, the significant increase in foreign
grants and aids by 560% boosted the fiscal revenue.
Moreover, the current account deficit declined by around
26% in 2008, resulting from the rising oil prices, which led
to a 27% increase in oil exports value that represented
86% of total exports proceeds. In addition, the 53%
Global - MENA Economies
increase in the transfers’ account, which came on the back
of higher workers’ remittances, also helped to improve the
current account position in 2008.
The emergence of the financial crisis in the last quarter of
2008 and the drop in oil prices thereafter are expected to
adversely affect Yemen’s economy. IMF projected that
Yemen real GDP will grow by 4.2% in 2009 and to
strongly rebound back to grow by 7.3% in 2010.
The fall in oil price, along with the declining oil production
will result in lower oil revenue, which in turn will
negatively affect the country’s current account and fiscal
balances. In addition, the current account will also be
negatively impacted by job losses of Yemeni workers in
neighbouring GCC countries.
However, Yemeni GDP growth is expected to receive a
boost in 2010, owing to the coming Liquefied Natural Gas
(LNG) project, which is planned to start production in late
2009.
Consumer price index eased to 6.6% in August 2009, after
it reached a peak of 19% in 2008. Inflation rate softened
following the drop in oil and food prices.
On late October 2009, the Yemeni Minister of Finance
announced the launch of the stock exchange by the end of
2009, with the help of bourse operator Dubai Financial
Market (DFM), where 9 government firms will be selected
to implement governance standards, in order to list them
on the stock exchange.
Yemen GDP is expected to continue its moderate growth
after 2010. However, the risks facing the Yemeni economy
are the current political turbulences, in addition to the
need for job creations for thousands of unemployed labor
force, add to that those who lost their jobs in GCC
countries, amid the financial crisis.
M2 Development
Source: Central Bank of Yemen
38
 Global - MENA Economies
 

Yemen
Economic Performance 2005 2006 2007* 2008* Q3 2009
Macro Indicators
Nominal GDP (YR bn) 3,422.7 4,119.0 4,720.6 5,734.7 -
Nominal GDP (US$ bn) 17.9 20.9 23.7 28.7 -
Nominal GDP Growth Rate (%) 29.1% 20.3% 14.6% 21.5% -
Real GDP (YR bn) + 2,045.2 2,123.5 2,216.6 2,319.8 -
Real GDP Growth Rate (%) 5.9% 3.8% 4.4% 4.7% -
Per capita GDP (US$) 881.6 1,000.1 1,101.6 1,293.1 -
Consumer Price Index (%) 11.8% 10.8% 7.9% 19.0% 6.6%
Population (mn) 20.3 20.9 21.5 22.2 -

Major contributor to GDP (%)

Hydrocarbon Sector 34% 32% 29% 29% -

Government Finance (YR mn)

Total Revenues and Grants 1,110,841 1,449,678 1,429,017 2,057,222 -
Total Expenditures (1,169,242) (1,403,966) (1,733,480) (2,315,581) -
Overall Fiscal Surplus/(Deficit) (58,401) 45,712 (304,463) (258,359) -
Fiscal Balance % of GDP -1.7% 1.1% -6.4% -4.5% -

Balance of Payment (YR mn)

Trade Balance 326,988 272,532 (87,648) 29,248 -
Total Exports 1,228,776 1,440,894 1,400,497 1,793,110 -
Total Imports (901,788) (1,168,362) (1,488,145) (1,763,862) -
Services (net) (164,488) (257,421) (227,154) (290,109) -
Income (net) (309,135) (243,208) (268,236) (394,685) -
Transfers (Net) 271,597 272,307 283,347 432,889 -
Current Account 124,961 44,210 (299,690) (222,657) -
Current Account % of GDP 3.7% 1.1% -6.3% -3.9% -
Capital & Financial Account (47,802) 209,797 234,602 257,939 -
Errors & Omissions 36,538 31,061 92,597 85,474 -
Overall balance 113,697 285,068 27,510 120,756 -

Money Supply (YR mn)

Money Supply - M1 442 558 614 680 764
Quasi Money 665 855 1,038 1,197 1,259
Total Domestic Liquidity (M2) 1,107 1,414 1,651 1,877 2,023

Interest Rates
Lending Rate 15%-21% 15%-21% 15%-21% 15%-21% 15%-21%
3-Months Deposits 13.0% 13.0% 13.0% 13.0% 10.0%
Saving Deposits 13.0% 13.0% 13.0% 13.0% 10.0%
Private Credit as % of GDP 6.6% 6.5% 7.6% 7.4% -

Capital Market Indicators

Stock Market Index (Points) - - - - -
Market Capitalization (YR bn) - - - - -
Market Cap/GDP 0.0% 0.0% 0.0% 0.0% 0.0%
Total Volume of traded shares (mn) - - - - -
Total Value of traded shares (YR mn) - - - - -

Exchange Rate
US$/YR (average rate) 191.42 197.05 198.95 199.78 205.40
* Preliminary
+ Base Year 2000
The 2009 figures are as of Q3 2009, except the inflation is as of August 2009.
Source: Central Bank of Yemen, Central Statistics Organization and Global Research

39
 
 Global - MENA Economies
 

Statistical Appendix

40
 
 Global - MENA Economies
 
Real GDP Growth

2005 2006 2007 2008 2009* 2010*

North Africa & Sudan 5.5% 6.5% 5.9% 5.6% 3.4% 4.4%

Algeria 5.1% 2.0% 3.0% 3.0% 2.1% 3.7%

Egypt 4.5% 6.8% 7.1% 7.2% 4.7% 4.5%

Libya 9.9% 5.9% 5.6% 6.1% 1.8% 5.2%

Morocco 3.0% 7.8% 2.7% 5.6% 5.0% 3.2%

Tunisia 4.1% 5.3% 6.3% 4.6% 3.0% 4.0%

Sudan 6.3% 11.3% 10.2% 6.8% 4.0% 5.5%

Levant and Iraq 4.7% 3.9% 4.3% 6.8% 4.5% 4.8%

Jordan 8.1% 8.0% 8.9% 7.9% 3.0% 4.0%

Lebanon 2.5% 0.6% 7.5% 8.5% 7.0% 4.0%

Syria 4.5% 5.1% 4.2% 5.2% 3.0% 4.2%

Iraq 2.4% 10.5% 1.5% 9.8% 4.3% 5.8%

Palestine (West Bank and Gaza Strip) 6.0% -4.8% -1.2% 2.3% 5.5% 6.5%

GCC & Yemen 8.7% 7.9% 7.2% 7.6% 3.3% 6.7%

Bahrain 7.9% 6.7% 8.4% 6.3% 3.0% 3.7%

Kuwait 10.6% 5.2% 4.4% 4.4% -1.5% 3.3%

Oman 4.9% 6.0% 7.7% 7.8% 4.1% 3.8%

Qatar 9.2% 15.0% 15.3% 16.4% 11.5% 18.5%

Saudi Arabia 5.6% 3.2% 3.3% 4.4% 0.2% 3.0%

United Arab Emirates 16.8% 14.9% 6.0% 7.4% -0.2% 2.4%

Yemen 5.9% 3.8% 4.4% 4.7% 4.2% 7.3%

MENA 6.5% 6.4% 6.0% 6.8% 3.7% 5.4%

*As projected by the IMF, October 2009.

41
 
 Global - MENA Economies
 
Inflation Rate

2005 2006 2007 2008 2009* 2010*

North Africa & Sudan 4.6% 3.9% 5.8% 8.6% 7.3% 5.3%

Algeria 1.6% 2.5% 3.5% 4.5% 3.5% 3.3%

Egypt 11.4% 4.2% 11.0% 11.7% 16.2% 8.0%

Libya 3.0% 1.4% 6.2% 10.4% 5.0% 4.5%

Morocco 1.0% 3.3% 2.0% 3.9% 2.8% 2.8%

Tunisia 2.0% 4.5% 3.1% 5.0% 3.5% 3.4%

Sudan 8.5% 7.2% 8.0% 14.3% 10.0% 8.0%

Levant and Iraq 8.8% 20.6% 4.9% 9.8% 4.8% 4.6%

Jordan 3.5% 6.3% 4.7% 13.9% 3.5% 3.3%

Lebanon -2.6% 5.6% 9.3% 5.5% 2.9% 3.0%

Syria 7.4% 10.3% 4.2% 15.2% 7.5% 6.0%

Iraq 31.6% 64.8% 4.7% 6.8% 6.0% 6.0%

Palestine (West Bank and Gaza Strip) 4.1% 3.8% 1.9% 9.9% 2.5% 3.0%

GCC & Yemen 5.2% 6.2% 7.6% 12.2% 3.4% 5.0%

Bahrain 2.6% 2.1% 3.3% 3.5% 3.0% 2.5%

Kuwait 4.1% 3.0% 5.5% 10.6% 4.7% 4.4%

Oman 1.9% 3.5% 5.9% 12.4% 3.1% 2.9%

Qatar 8.8% 11.8% 13.6% 15.2% 0.0% 4.0%

Saudi Arabia 0.7% 2.2% 4.1% 9.9% 4.4% 4.6%

The United Arab Emirates 6.2% 9.3% 11.1% 12.3% 2.6% 3.3%

Yemen 11.8% 10.8% 7.9% 19.0% 6.1% 11.7%

MENA 6.0% 9.6% 6.2% 10.3% 5.0% 5.0%

*As projected by the IMF, October 2009.

42
 
 Global - MENA Economies
 
Current Account (% of GDP)

2005 2006 2007 2008 2009* 2010*

North Africa & Sudan 9.0% 9.5% 9.0% 8.6% -0.7% 2.7%

Algeria 20.6% 24.8% 22.6% 21.6% 2.7% 7.3%

Egypt 3.2% 1.6% 1.7% 0.5% -2.3% -2.8%

Libya 38.9% 43.4% 40.2% 41.9% 16.7% 24.0%

Morocco 1.9% 2.2% -0.1% -5.4% -5.5% -4.7%

Tunisia -1.0% -2.0% -2.6% -4.2% -3.8% 2.9%

Sudan -11.1% -13.0% -7.0% -2.3% -11.2% -9.1%

Levant and Iraq -9.7% -2.1% -0.2% 0.6% -11.5% -8.5%

Jordan -17.4% -10.8% -17.3% -11.4% -10.0% -8.8%

Lebanon -12.6% -5.1% -5.3% -10.4% -11.3% -10.5%

Syria 1.1% 2.7% 1.1% -1.3% -3.2% -4.3%

Iraq 3.4% 10.3% 21.9% 24.4% -28.4% -15.2%

Palestine (West Bank and Gaza Strip) -22.4% -7.9% 0.2% 2.4% -2.6% -2.4%

GCC & Yemen 19.0% 20.1% 14.9% 15.5% 6.0% 13.1%

Bahrain 11.0% 13.8% 15.7% 10.3% 3.7% 6.2%

Kuwait 37.3% 44.7% 40.8% 43.7% 29.4% 35.3%

Oman 16.8% 15.4% 6.2% 9.1% -0.5% 4.8%

Qatar 17.6% 16.7% 14.7% 14.1% 10.8% 25.3%

Saudi Arabia 28.5% 27.8% 24.3% 28.6% 5.5% 11.4%

The United Arab Emirates 17.7% 20.6% 9.5% 8.8% -1.6% 5.2%

Yemen 3.7% 1.1% -6.3% -3.9% -5.2% -2.3%

MENA 7.9% 10.7% 9.0% 9.3% -0.8% 4.1%

*As projected by the IMF, October 2009.

43
 
 
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