In April, the IMF revised down its real GDP forecasts for the Middle East and North Africa, attributing its decision to ongoing conflicts, political instability and low oil prices. In its World Economic Outlook report, the IMF also hailed Saudi Arabia’s commitment to oil production cuts and said it expects crude prices to average $55 a barrel in 2017-18.

Also in April, the US unleashed air strikes on Syria in response to the Al-Assad regime’s suspected use of sarin gas on civilians, marking a new development in the six-year-long conflict.

Elsewhere, militants in Egypt targeted two churches on Palm Sunday, killing more than 40 people in two Nile Delta cities.

IMF revises growth forecast for Middle East and North Africa

The IMF’s latest World Economic Outlook report predicts real GDP growth rates for the Middle East and North Africa region of 2.3 per cent in 2017 and 3.2 per cent in 2018.

The projections for 2017 and 2018 are down 0.5 and 0.1 percentage points respectively, compared with the IMF’s previous forecasts, made in January this year.

In 2016, GDP growth for the region was estimated at 3.8 per cent.

The IMF sees the picture improving for the region’s oil exporters in 2018, with real GDP growth of 2.9 per cent.

IMF hails Saudi-brokered oil production cuts

The IMF’s latest World Economic Outlook report states that Saudi Arabia’s commitment to lowering oil production since January, and recent indications that it could reduce output beyond its initial commitment, could enhance the credibility of the Opec production-cut deal that was agreed in late 2016.

“In response to these agreements, spot oil prices increased to more than $50 a barrel,” said the report. “Oil prices beyond that level will stimulate investment, which is expected to increase in 2017 after two consecutive years of significant decline.”

The report projected crude prices to rise to an average of $55 a barrel in 2017-18, compared with an average of $43 a barrel in 2016.

“Oil prices increased by some 20 per cent between August 2016 and February 2017, in part due to the agreement by Opec and other producers to cut oil production,” said the IMF report.

Moratorium lift will boost Qatar’s economy

State-owned Qatar Petroleum’s decision to lift the 12-year-old self-imposed moratorium on developing its offshore North Field gas asset will boost the country’s economic growth, according to US-based ratings agency Moody’s Investors Service.

“It will boost GDP growth and government revenue once it materialises, in five to seven years,” Moody’s said in its latest Investors Services assessment.

Ahmadinejad’s election bid strengthens Iran’s hardliners

Former president Mahmoud Ahmadinejad has filed a nomination to run in Iran’s upcoming elections, marking a turnaround from his earlier promise not to contest.

The Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei had in 2016 advised Ahmadinejad, who held office from 2005 to 2013, not to contest in the 19 May elections.

Current president Hassan Rouhani, with his moderate stance, had been the longstanding favourite to win the elections. However, the appointment of Donald Trump as US president, who opposed the Joint Comprehensive Plan of Action in his election campaign, has cast doubts on Rouhani’s re-election as hardliners seek to adopt a more confrontational approach to Washington.

Saudi Arabia caps sukuk issuance at $9bn

Saudi Arabia has set the size of its debut sharia-compliant dual-tranche dollar bond issuance at $9bn, the largest ever Islamic notes to be issued globally.

The kingdom has split the deal between a five-year and a 10-year tranche of $4.5bn each. Fixed-income investors and analysts were expecting Riyadh to tap the market for $10bn.

Saudi Arabia says it received significant interest from investors, with the orderbook reaching in excess of $33bn.

“This reflects the strong fundamentals of the Saudi economy,” the Ministry of Finance said in a statement, adding that the deal illustrates the role of the kingdom’s Debt Management Office, which was established as part of Riyadh’s Vision 2030.

Church attacks present more problems for Egypt’s economy

The bombs that rocked two churches in Egypt’s Nile Delta region on 9 April have renewed security concerns in the country.

The explosions, which were claimed by the Islamic State of Iraq and Syria-affiliated Sinai Province, follow the Cairo Abassiya Cathedral attack in December 2016, and are an indication the militant group is taking its fight to mainland Egypt after years of its insurgency being limited to the Sinai peninsula.

Foreign investors have voiced concerns over Cairo’s inability to curb the threat of terrorism across the country. Its security forces have been locked in a fierce battle with militants in the Sinai peninsula over the past two years and although attacks have usually targeted security personnel, recent incidents have illustrated the group’s efforts to take their fight to Cairo and some of Egypt’s major cities.

For the authorities, the security of Egyptians will be the top concern. But fears over the impact such attacks have on investor confidence and the ailing tourism sector will also be worrying policymakers in Cairo. The latest bombings show that despite a comprehensive military operation in the Sinai area, Cairo is lacking key intelligence mechanisms to snuff out terrorist threats.

Cairo has aggressively clamped down on Islamists over the past three years, with more than 40,000 political prisoners currently in Egyptian jails. But many security experts have accused the government of indiscriminately targeting any sort of dissent.

Lebanon postpones offshore prequalification results

Lebanon’s energy and water ministry has postponed announcing the names of the firms prequalified for its latest offshore licensing round.

The results will be announced on 28 April to allow more time for applicants to provide additional data, documents and clarifications, the Lebanese Petroleum Administration (LPA) said in a joint statement with the ministry.

Lebanon has been speeding up efforts to develop its offshore oil and gas assets ever since a new government was sworn in last year. The new cabinet issued decrees in January to relaunch the licensing round, which had stalled for three years because of political impasse. The LPA is offering blocks 1, 4, 8, 9 and 10 for potential bidders.

Syrian regime continues to deny chemical attack

Syria’s President Bashar al-Assad has said the alleged chemical attack on 4 April is a “fabrication” to justify the US air strikes that followed the incident.

The US cruise missile attack on 7 April was the first time American forces had targeted the Syrian army since the start of the war six years ago.

At the time of the incident, Syria denied any use of chemical weapons, and Moscow said the deaths had been the result of a conventional strike hitting a rebel arms depot containing “toxic substances”.

“Our impression is that the West, mainly the US, is hand-in-glove with the terrorists,” said Al-Assad. “They fabricated the whole story in order to have a pretext for the attack.”

Kuwait signs refinery agreement with Oman

Kuwait and Oman have signed a partnership agreement to develop the sultanate’s largest single-phase refinery project at Duqm.

Kuwait will replace Abu Dhabi’s International Petroleum Investment Company (Ipic), which exited the project in 2016.

Oman Oil Company is developing a 230,000 barrel-a-day refinery in the southern port city of Duqm to diversify its earnings from its maturing hydrocarbon assets.

Ipic, which signed a joint venture agreement on the project in 2009, exited the scheme last year citing that the direction of the project, which included petrochemicals, no longer fitted in with its current strategy.

Further Reading

Saudi Arabia invites bids for 300MW solar project

Saudi Arabia’s Renewable Energy Project Development Office, which is part of the energy ministry, has issued a request for proposals to prequalified firms for a 300MW photovoltaic solar project at Sakara.

Riyadh lets three airport PPPs

A team of Lebanon’s Consolidated Contractors Company, Germany’s Munich Airport and the local Asyad Holding has been appointed to develop and operate the Taif airport, while a team of Turkey’s TAV and the local Al-Rajhi Holding has been selected for airports at Al-Qassim and Hail.

Bahrain plans $10bn-plus airport on reclaimed island

Bahrain is planning to build a new $10bn-plus airport on a reclaimed island to the north of the existing Bahrain International airport. The new island will require dredging and infrastructure, including a bridge or causeway that will connect it to the rest of Bahrain.

Aramco tenders $4.5bn of gas processing plant deals

Saudi Aramco has invited bids for the main packages of an estimated $4.5bn project to expand gas processing capacity at Haradh and Hawiyah in Saudi Arabia. The work involves building compression plants at Haradh and expanding the Hawiyah plant.