• PDF: Immediate delivery

Oman and Yemen Business Forecast Report Q4
2011

  • Publication Date:September 2011
  • Publisher:Business Monitor
  • Product Type: Report
  • Pages:69

Oman and Yemen Business Forecast Report Q4 2011

Core View - Oman

Elevated oil revenues and robust government spending will be the primary drivers of Oman's growth momentum over the medium term. Given our expectation of declining oil prices and reduced tourism revenues, we project real GDP growth to decline from 4.5% y-o-y in 2011 to 3.4% in 2012.

Public protests will continue in Oman, but we do not expect them to escalate to the scale seen in other MENA countries. The government has been very proactive in creating employment opportunities for jobseekers, limited legislative powers have been given to the parliament, and inflation has been moderate.

Major Forecast Changes

While international energy prices have remained elevated, a substantial rise in fiscal spending has prompted us to revise down our 2011 fiscal budget forecast from 9.3% of GDP to 4.7%. We expect fiscal expenditures to rise 13.0% y-o-y in 2011, aimed at current spending initiatives, which will weigh on the budget and reduce the surplus.

Key Risks To Outlook

We stress that for the foreseeable future, Oman's economy will remain highly reliant on oil revenues, and caution that should prices record a more pronounced drop before the economy has been well-enough diversified away from the energy sector, our positive outlook might prove overly-optimistic.

The autocratic nature of the political regime in Oman (and elsewhere in the Gulf) will ensure that risks of an uptick in protest activity by pro-democracy demonstrators will remain elevated, which would generate uncertainty and in turn deter investors away from the market.

Core View - Yemen

With fixed investment and private consumption likely to take a major hit this year, we believe Yemen's economy will contract in 2011 by 5.0%. We expect the country will recover relatively quickly from this year's unrest, and forecast real GDP growth of 2.4% in 2012. S imilar to most of the other foodstuff importers in the Middle East and North Africa, Yemen will likely suffer from the increase in global commodity prices. However, while most governments increased subsidies for imported food products, Sana'a lacks the financial leeway to cope with the imported inflationary pressures.

Major Forecast Changes

On the back of ongoing political unrest, we have revised down our forecasts for Yemen's current account. We now project a current account deficit of 4.8% of GDP in 2011, compared with a deficit of 2.3% of GDP in 2010.

Key Risks To Outlook

The central risk to our outlook for Yemen is political. Although a negotiated transition of power to a new government remains our core scenario, there is a growing possibility that the security situation could deteriorate further. President Ali Abdullah Saleh has repeatedly reneged on commitments to participate in a transfer of power, and violence in the south has been intensifying in recent weeks. Persisting violence in Yemen could have drastic implications for the Gulf Cooperation Council (GCC ) region, potentially driving the wealthy oil-exporting nations to contribute with aid and alleviate some of these problems. Saudi Arabia has already sent 3mn barrels of oil to Yemen to address fuel shortages.

  • Bmi Risk Ratings
    • BMI Risk Ratings - Oman
    • BMI Risk Ratings - Yemen
    • BMI Risk Ratings - Middle East Tables
    • Middle East - Ratings League Tables
  • Executive Summary
    • Core Views:
    • Major Forecast Changes:
    • Key Risks To Outlook:
  • Chapter 1.1: Political Outlook - Oman
    • SWOT Analysis
    • Domestic Politics
    • Protests To Remain Contained
    • Public protests in Oman have continued despite a series of government reforms aimed at creating more employment opportunities and
    • ceding powers to the parliament
    • Long-Term Political Outlook
  • Chapter 1.2: Economic Outlook - Oman
    • SWOT Analysis
    • Economic Activity
    • Government Spending Driving Growth
    • TABLE: OMAN - ECONOMIC ACTIVITY
    • Fiscal Policy
    • Oil Exports Leave Budget In Good Shape
    • Monetary Policy
    • Inflation To Keep Falling
    • TABLE: OMAN - monetary policy
    • Regional Oulook
    • GCC Monetary Union: Don't Get Your Hopes Up
    • TABLE: Exports to eurozone as percentage of total exports, for euro-16 (excluding Estonia)
  • Chapter 1.3: 10-Year Forecast - Oman
    • The Omani Economy To 2020
    • The Next Episode: Shifting Away From Oil
    • Declining oil production will weigh on growth over the coming decade
    • TABLE: Om an Long-Term Macroeconomic Forecasts
  • Chapter 1.4: Business Environment - Oman
    • SWOT Analysis
    • Oman Business Environment
    • Institutions
    • TABLE: BMI Business And Operation Risk Ratings
    • TABLE: BMI Legal Framework Rating
    • Infrastructure
    • TABLE: Labour Force Quality
    • Market Orientation
    • TABLE: Middle East and Africa - Annual FDI Inflows
    • TABLE: Trade And Investment Ratings
    • Operational Risk
    • TABLE: Top Export Destinations
  • Chapter 2.1: Political Outlook - Yemen
    • SWOT Analysis
    • Domestic Politics
    • Transition Deadlock Prevails; Risks Rising
    • The deadlock in Yemen's political transition is likely to continue for now, but we believe that President Ali Abdullah Saleh will soon be
    • forced to give up power
    • TABLE: Yemen Political Overview
    • Long-Term Political Outlook
  • Chapter 2.2: Economic Outlook - Yemen
    • SWOT Analysis
    • Economic Activity
    • Economic Recovery Depends On Political Resolution
    • We forecast that Yemen's economy will contract by 5.1% in 2011, and grow by 2.4% in
    • TABLE: YEMEN - ECONOMIC ACTIVITY
    • Balance Of Payments
    • Growing Risks To Balance Of Payments Stability
    • We are revising down our forecasts for Yemen's current account balance this year
    • TABLE: yemen - current account
  • Chapter 2.3: 10-Year Forecast - Yemen
    • The Yemeni Economy To 2020
    • Oil And Water: Not Enough Of Either
    • TABLE: YEMEN Long-Term Macroeconomic Forecasts
  • Chapter 2.4: Business Environment - Yemen
    • SWOT Analysis
    • Yemen Business Environment
    • Institutions
    • TABLE: BMI Business And Operation Risk Ratings
    • Infrastructure
    • TABLE: BMI Legal Framework Rating
    • Market Orientation
    • TABLE: Labour Force Quality
    • TABLE: Middle East and Africa - Annual FDI Inflows
    • TABLE: Trade And Investment Ratings
    • Operational Risk
    • TABLE: Top Export Destinations
  • Chapter 3: Bmi Global Assumptions
    • Global Outlook
    • US Slows Down As Eurozone Picks Up
    • TABLE: GLOBAL ASSUMPTIONS
    • TABLE: DEVELOPED STATES REAL GDP GROWTH FORECAST (% chg y-o-y)
    • TABLE: REAL GDP GROWTH - BLOOMBERG CONSENSUS FORECASTS
    • TABLE: EMERGING MARKETS AGGREGATE GROWTH (% chg y-o-y)
+44 20 8816 8548

Ask a question about Oman and Yemen Business Forecast Report Q4

Enter the characters you see in the picture below
Captcha