2014: a year in data – MENA
Two regions in one
Conflict and the rise of Islamic State made the Middle East arguably the geopolitical story of 2014. The long-term story of the Middle East in terms of finance and economics is one of the haves and the have-nots. The gulf between the resource-rich, and relatively stable, GCC countries versus the poorer, war-torn remainder of MENA has never been more stark, as data from Euromoney Country Risk prove.
Crude oil prices dropped precipitously in the latter part of 2014, raising challenging questions about where they might go in 2015. Undershooting well below a mythical fundamental equilibrium price is a distinct possibility if history is any guide.
The security crisis brought on by the rise of Islamic State could turn Iran from pariah to much-needed partner to the west. Financial sanctions have hit both Iran’s economy and its banks hard. Inflation is rampant, NPLs are soaring, while banks lack capital. Corporates can’t get the funding they need. Local bank chiefs are itching to open their doors once again to foreign counterparties. If sanctions are lifted, what will the world’s bankers find in Tehran and beyond?
The Emirates’ economy has recovered much of the ground it lost in 2008. The country’s banks are taking advantage by growing strongly. Is there a danger of another round of overheating?