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Country Risk Weekly Bulletin 563

December 13, 2018
Country Risk Weekly Bulletin 563

Remittance Inflows to Arab Countries in 2018 (% of GDP)

 

Source: World Bank, International Monetary Fund, Byblos Research   

 

  • Remittance inflows to Arab countries up 9% to $59bn in 2018
    The World Bank estimated remittance inflows to Arab countries at $59bn in 2018, constituting an increase of 9.2% from $54bn in 2017, compared to an increase of 6.8% in 2017 and a contraction of 0.5% in 2016. It attributed the growth in remittances to the Arab region mainly to a surge in remittance inflows to Egypt, Palestine and Sudan. It anticipated that improved economic growth in Europe would support remittance inflows to Morocco and Tunisia in 2018. Further, it said that inflows to Arab countries would account for 4.3% of global remittance flows and for 11.4% of remittances to developing economies in 2018. The Arab region ranked as the second smallest recipient in developing markets, ahead of only Sub-Saharan Africa (8.7%). Also, the figures show that the increase in remittance inflows to Arab countries in 2018 is the second lowest among developing economies, ahead of only East Asia & Pacific (+6.6%). In parallel, the Bank expected Egypt to be the largest Arab recipient of remittances this year with $25.7bn or 43.5% of the total, followed by Lebanon with $7.8bn (13.2%), Morocco with $7.4bn (12.5%), Jordan with $4.4bn (7.4%), Yemen with $3.35bn (5.7%), Palestine with $2.7bn (4.6%), Algeria with $2.2bn (3.7%) and Tunisia with $2bn (3.4%), while the remaining eight Arab countries will receive $3.5bn in remittances, or 5.9% of the total. Remittance inflows to Palestine are estimated to be equivalent to 18% of GDP in 2018, the highest in the region, followed by Lebanon at 13.7% of GDP, Yemen at 11.7% of GDP, Jordan at 10.5% of GDP and Egypt at 10.3% of GDP. Excluding Syria, remittance inflows to Arab countries would be equivalent to about 2.1% of the region's GDP this year relative to 2.2% of GDP in 2017.
    Source: World Bank, Byblos Research
     

  • Profits of listed firms in Iraq up 6% to $304m in first nine months of 2018
    The cumulative unaudited pre-tax profits of 79 out of 123 companies listed on the Iraq Stock Exchange totaled IQD371.4bn in the first nine months of 2018, constituting an increase of 2% from IQD364.2bn in the same period of 2017. In US dollar terms, the profits of listed companies reached $304m in the first nine months of 2018 and increased by 6% from $286.8m in the same period of 2017. The dollar figures reflect the prevailing official exchange rate that appreciated from an average of IQD1,270 per US dollar in the first nine months of 2017 to an average of IQD1,222 per US dollar in the first nine months of 2018. Listed telecommunication firms generated profits of $215.7m and accounted for 71% of total earnings in the covered period. Banks followed with $46.9m (15.4%), then industrial firms $32.3m (10.6%), companies in the hotel & tourism sector with $6.1m (2%), services firms with $2.2m (0.7%), insurers with $0.9m (0.3%) and money transfer operators with $0.2m (0.1%). Further, the profits of firms operating in the hotel & tourism sector rose by 181.5% year-on-year in the first nine months of 2018, followed by the earnings of telecommunication companies (+155.4%), the earnings of firms in the services sector (+28%), and companies in the industrial sector (+22.9%). In contrast, the profits of money transfer operators decreased by 90% annually in the first nine months of 2018, followed by the income of banks (-72.4%) and insurers (-6.3%). 
    Source: Rabee Securities, Iraq Stock Exchange
     

  • Armenia's sovereign ratings affirmed, outlook 'positive'
    Fitch Ratings affirmed Armenia's long-term foreign- and local-currency Issuer Default Ratings (IDRs) at 'B+', with a 'positive' outlook. It indicated that the ratings are supported by the country's credible monetary policy framework and higher income per capita than similarly-rated peers, but are constrained by Armenia's elevated public and external debt levels and tensions with some neighboring countries. It forecast real GDP growth at 5% in 2018, supported by private consumption and investment. Further, the agency noted that authorities are reviewing spending across all areas to identify inefficiencies, which has resulted in lower-than-budgeted spending. As such, it expected Armenia's fiscal deficit to narrow from 4.8% of GDP in 2017 to 2.2% of GDP in 2018 relative to the budgeted deficit of 2.7% of GDP. It also projected the general government debt level to decline from 58.9% of GDP at the end of 2017 to 56.2% of GDP by end-2020. However, it noted that the country's debt is exposed to exchange rate risks, given that 80.8% of total debt was denominated in foreign currency as at end-October 2018. In addition, Fitch expected the current account deficit to widen from 2.4% of GDP in 2017 to 5.1% of GDP in 2018 amid strong domestic demand, and to average 4.3% of GDP annually in the 2019-20 period, mainly due to sustained import growth. It anticipated that the deficit would be mostly financed by foreign direct investments and external borrowing of the public sector. In parallel, it forecast foreign currency reserves to cover about 3.5 months of current external payments by end-2018, which is in line with the median of 'B'-rated peers.
    Source: Fitch Ratings
     

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