Fitch warned that the Middle East region is entering 2025 “on shaky ground,” against the backdrop of the ongoing war, economic headwinds, and political uncertainty following the US elections, during a webinar earlier this week. The agency expects the region’s economy to grow at c. 1.8% in 2024, down from the 2.3% it penciled in last August, according to Fitch Solutions company BMI’s latest outlook (pdf).

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A rebound is expected next year: The regional economy will pick up to over 3% by next year, according to its forecast.

What about Egypt? BMI expects the IMF to extend the reforms timeline set under the USD 8 bn loan program with Egypt, especially seeing that Egypt has already slashed subsidies and hiked the prices of a number of commodities — including fuel. BMI also sees regional tensions continuing to hurt Suez Canal revenues, penciling in a high probability of a prolonged war with continued Houthi attacks on ships passing through the Red Sea.

UAE to lead the region: BMI anticipates the Emirates’ economy to grow at the fastest pace in 2025, anticipated to accelerate to 5.2% in 2025, fueled by increased oil production and the government’s diversification efforts.

BMI also sees strong growth for Saudi Arabia, forecasting the Kingdom’s economy to make a dramatic rebound from approximately 0.3% in 2024 to around 4.7% in 2025.

Downside risks remain: Potential risks that could hamper growth include Opec’s production cuts failing to lift oil prices, which could hinder diversification efforts in the region, Fitch analysts noted during the webinar.

EGX30

30,553

+0.5% (YTD: +22.7%)

USD (CBE)

Buy 48.73

Sell 48.86

USD (CIB)

Buy 48.73

Sell 48.83

Interest rates (CBE)

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28.25% lending

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DFM

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THE CLOSING BELL-

The EGX30 rose 0.5% at Thursday’s close on turnover of EGP 4.2 bn (0.9% above the 90-day average). Regional investors were the sole net buyers. The index is up 22.7% YTD.

In the green: B Investments (+2.8%), Telecom Egypt (+1.8%), and Madinet Masr (+1.7%).

In the red: Oriental Weavers (-3.3%), GB Corp (-1.8%), and Fawry (-1.1%).

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