Debt sales across the Middle East and North Africa (MENA) region are likely to reduce by 6% this year following a 30% decline in 2017, according to a report from ratings agency Standard & Poor’s (S&P) and cited by the Arab News.
S&P anticipates government spending cuts and a healthier oil price to control new debt.
S&P rates 13 MENA region states and, in total, these are forecast to borrow about $181bn this year, which is a decline of $11bn on 2017. Egypt is the largest borrower with $46.4bn or 26% of the region’s gross commercial long-term borrowing, with Iraq second at $35bn or 19% of the total.
Oil major Saudi Arabia, at the present time the third biggest oil producer globally, has been loaned around $31bn.
Egypt’s should be boosted medium-term from revenues from its vast offshore Zohr gas field, while despite present output cuts, Saudi Arabia should benefit from a rise in Brent crude prices which is currently trading between $65-70 a barrel. Steep oil price drops in 2014 and 2015 resulted in a “significant widening of GCC fiscal deficits,” according to S&P.
