Arab stock markets improved by 9.1% and Gulf Cooperation Council equity markets rose by 8.8% in the first four months of 2018, relative to decreases of 1.5% and 1.9%, respectively, in the same period of 2017. In comparison, global equities declined by 0.6%, while emerging market equities regressed by 1.6% in the covered period. Activity on the Egyptian Exchange jumped by 21.8% in the first four months of 2018, the Tunis Bourse surged by 14%, the Saudi Stock Exchange improved by 13.6%, the Khartoum Stock Exchange increased by 9.1%, the Qatar Stock Exchange appreciated by 6.9%, the Abu Dhabi Securities Exchange expanded by 6.2%, the Casablanca Stock Exchange grew by 5.2%, the Iraq Stock Exchange increased by 4.6%, the Amman Stock Exchange improved by 3%, and the Beirut Stock Exchange expanded by 1.4%, while the Damascus Securities Exchange was nearly unchanged in the covered period. In contrast, activity on the Dubai Financial Market dropped by 9%, the Muscat Securities Market declined by 7.3%, the Palestine Exchange decreased by 6.4% and the Bahrain Bourse regressed by 5.5% in the covered period. In parallel, activity on the Tehran Stock Exchange dropped by 2.1% in the first four months of 2018. 
Source: Local stock markets, Dow Jones Indices, Byblos Research

The International Monetary Fund forecast real GDP growth in oil-exporting economies of the Middle East & North Africa (MENA) region to accelerate from 1.7% in 2017 to 2.8% in 2018, mainly due to a recovery in non-hydrocarbon sector activity as the pace of fiscal consolidation eases compared to previous years. It projected non-hydrocarbon sector activity in MENA oil exporters to increase from 2.6% last year to 3.2% in 2018. It forecast growth in Gulf Cooperation Council (GCC) economies at 1.9% in 2018 relative to a contraction of 0.2% in 2017, while it anticipated the region's non-oil sector activity to accelerate from 1.8% last year to 2.7% in 2018. Further, the IMF considered that downside risks to the MENA oil exporters' growth outlook consist of lower-than-anticipated oil prices, faster-than-expected tightening of global financial conditions, rising global trade tensions, and heightened geopolitical risks and regional conflicts.

In parallel, the Fund anticipated the slower but sustained fiscal consolidation efforts to ease the pressure on the fiscal balances of the region's oil-exporting economies this year, as it expected their fiscal deficit to narrow from 5.2% of GDP in 2017 to 3.8% of GDP in 2018. It forecast the GCC's aggregate fiscal deficit to narrow from 5.5% of GDP in 2017 to 3.4% of GDP in 2018. Further, it expected the aggregate public debt level of the region's oil exporters to increase from 33.4% of GDP at end-2017 to 36.9% of GDP at end-2018. It noted that the public debt of most MENA oil exporters has increased by an average of 10 percentage points of GDP annually since 2013, with countries financing large fiscal deficits through a combination of drawdowns of buffers and increased domestic and foreign borrowing. It projected the MENA oil exporters' cumulative fiscal deficits to reach $294bn in the 2018-22 period, while it forecast their government debt amortization at $71bn. It considered that countries are vulnerable to a sudden tightening of global financial conditions, given that the latter could add to interest payments and increase existing fiscal challenges.
Source: International Monetary Fund

The International Monetary Fund projected Sudan's real GDP growth to accelerate from 3.2% in 2017 to 3.7% in 2018, compared to a growth rate of 4.3% for oil importers in the MENA region this year, supported by the lifting of U.S. trade and financial sanctions in October 2017, stronger domestic demand and higher foreign investment flows. However, it forecast economic growth to decelerate to 3.5% in 2019 amid ongoing fiscal and external challenges. Also, it expected Sudan's inflation rate to average 43.5% in 2018 and 39.5% in 2019 compared to 32.4% last year. 

In parallel, the Fund projected the fiscal deficit to widen from 1.4% of GDP in 2017 to 3.1% of GDP in 2018, but to narrow to 2.9% of GDP in 2019. Further, it expected the government's gross debt level to rise from 126% of GDP at the end of 2017 to 176.5% of GDP at end-2018 and to 176% of GDP at end-2019. It also forecast the gross external debt to increase from 92.6% of GDP in 2017 to 133% of GDP in 2018 and 2019. Further, the IMF projected the country's current account to post deficits of $2.6bn, or 6.2% of GDP, in 2018, and of $2.9bn, or 6.8% of GDP, in 2019, compared to a deficit of $3.2bn, or 5.5% of GDP, last year. It expected Sudan's gross foreign currency reserves to rise from $0.9bn at the end of 2017 to $1bn at end-2018 and $1.1bn at end-2019.
Source: International Monetary Fund