The Middle East Economy

Growth in Saudi Arabia appears to be gathering pace, with a rise in oil production and continued strong consumer demand likely to boost GDP in the second half of the year. While inflationary pressures could arise as a result, analysts expect any price increases to be moderate over 2013.

The crisis in Syria is weighing heavily on the Jordanian economy. While the cost of supporting some 500,000 registered refugees is perhaps the most obvious challenge for a government with serious budget constraints, the impact of events across the border extends to multiple areas of the economy, from an increase in food prices to trade route disruptions.

The weakening of the lira could herald further problems for the cooling Turkish economy, with growth forecasts being scaled back and an expanding trade deficit taxing government efforts to keep interest rates low and inflation under control.

While Kuwait’s FDI figures were up in 2012, far more capital still leaves the country each year than enters it. However, the government is working to reverse this, in part by improving the legal framework for foreign investment.

Developing stronger ties between Jordan and Iraq was among the topics of discussion at the latest World Economic Forum (WEF) on the Middle East and North Africa, which was hosted by the Kingdom in May.

Government officials are becoming increasingly concerned that Turkish exporters could face stiffer competition in their biggest markets due to a looming free trade agreement (FTA) between the EU and the US, a deal that could undermine Ankara’s Customs Union with Europe.