Deep Dive: Middle East and North Africa
Stable outlook for the GCC sovereigns, underpinned by higher oil prices and output, contrasts with weak recovery prospects and growing social tensions in the rest of the MENA region
GCC government finances and growth will strengthen with supportive oil prices and a rebound in hydrocarbon production, although balance sheets will remain weaker than pre-pandemic for most sovereigns. Higher hydrocarbon revenue will also provide greater financial capacity to support diversification efforts and widens the window for structural fiscal reforms.
Regional geopolitical tensions will remain the key tail risk for the region. In contrast, economic recovery will be subdued across the rest of the Middle East, given the limited scope for fiscal policy to support growth, slow resumption of tourism and lingering pandemic risks as vaccine access remains limited and uneven. Weak growth will exacerbate social risks and weigh on debt dynamics.
In some cases, progress on economic reform will remain a hostage of domestic political divisions and growing social discontent, exacerbating government liquidity and external pressures. Debt overhang will leave the Levant and North Africa region vulnerable to future shocks.
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SpeakersAlexander Perjéssy Vice President - Senior Analyst, Sovereign Risk Group Moody's Investors Service
Mickaël Gondrand Analyst, Sovereign Risk Group Moody's Investors Service
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Alexander Perjéssy is Vice President – Senior Analyst at the Moody’s Sovereign Risk Group.
Based in Dubai, he has lead analyst responsibilities for a number of sovereigns in the Middle East, including most of the Gulf Cooperation Council member states and several regional multilateral institutions.
Prior to joining Moody’s in November 2017, Alex worked for two years as economist at the Islamic Development Bank in Jeddah, Saudi Arabia.
Before relocating to the Middle East, Alex spent more than 12 years covering macroeconomic developments and sovereign risk assessment in the emerging markets of the EMEA region for AllianceBernstein and The Rohatyn Group, both US-based asset management firms in New York, as well as for Goldman Sachs in London.
Alex holds an MA in Economics from the University of Maryland and a BA in Economics from Middlebury College.
Mickaël Gondrand is an Analyst in the Sovereign Risk Group for Moody’s Investors Service, having joined in March 2016. Based in London, he covers a range of African and Middle East sovereigns, including Tunisia, Uganda and Iraq.
Prior to joining Moody’s Mickaël was a Senior Country Risk Analyst at BMI Research (Fitch), focusing on the Middle East and North Africa.
Mickaël holds a Master’s in International Political Economy from Sciences Po Paris and a MSc in Management and Strategy from the London School of Economics (LSE).