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June 29, 2020
Saudi Arabia’s move towards a cash less economy propelled by COVID-19
Let us look at the usage of cash in Saudi Arabia, the largest economy in the GCC. The question is whether usage of cash is going up or going down, are people moving towards a cash less economy as is being talked about by some of the influential thinkers who believe in the digital economy. Digital technologies have brought about great ease of investing in financial securities and quick conversion to cash of such assets. With such technological developments, it...
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April 16, 2020
كوفيد-19: القطاعات ذات التأثير الشديد
As the COVID-19 pandemic continues to cast its shadow far and wide, businesses across sectors are likely to be negatively impacted. This has also reflected in equities, as stocks across sectors have taken a hit. Exhibit: GCC Indices and their YTD (in %) Source: Refinitiv; Note: Data as of 25th Mar 2020. Cyclicals includes Hospitality, Tourism; Basic Materials includes Construction; Industrials includes Aviation, Logistics. While initial concerns were of a spill over effect from China, the virus’ spread across regions,...
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November 17, 2019
How does remittance cost in the GCC stack up?
Cost of remittance varies across GCC countries and is dependent both on the source and destination. Based on the average remittance cost across MTOs, it is observed that operators involved in transferring money from Qatar and Saudi Arabia have the highest remittance costs while that of Kuwait and the UAE have the lowest cost. For instance, the average cost of remittance of USD 200 from Qatar to India stands at 3.9% while that of Kuwait to India is 1.9%. Certain...
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July 15, 2019
Is Debt to GDP Ratio a good explanatory of country risk?
The Debt to GDP ratio is often taken as a measure to explain the risk rating associated with the Sovereign rating for that country. In this article we attempt to shed light on other explanatory variables for Sovereign ratings other than Debt to GDP ratio. Debt to GDP ratio of a country is a very important variable that determines the country’s Sovereign risk rating as it reflects the الدولة’s ability to service its debt. However, for lower income countries the...
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January 24, 2019
أسعار النفط قد لا تكون محفزاً لتنفيذ الإصلاحات
This article was originally published in Al Qabas Analyzing the historical trend of reforms in Kuwait, one can notice that financial services sector is the most regulated and therefore have experienced more reforms while sectors like healthcare and legal saw the least number of reforms. For a balanced and sustained economic growth, an even distribution of reforms across all critical sectors is a must. A popular coffee table discussion in Kuwait is to ask “when will serious reforms come to...
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December 18, 2018
Does Brexit pose an economic puzzle to the GCC?
This article originally published in AME Info. The UK’s vote to leave the European Union caused a period of uncertainty both in the financial markets and the political environment. The UK is the fifth largest economy in the world, and the Brexit process will have major economic repercussions. This led to countries and business entities strategizing their activities to respond to Brexit. The prospective cost to UK’s economy and impact of Brexit has brought into prominence its relation with the...
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September 17, 2018
قانون الإفلاس الجديد في السعودية
Saudi New Bankruptcy Law. Saudi Arabia had no single bankruptcy law in place that prescribes procedures for businesses that face financial difficulty. The courts have traditionally refrained from declaring a debtor to be bankrupt until all feasible methods of debt enforcement are exhausted. This brought about a number of problems such as: No set procedure for collection of debts which leads to settlement of some creditors while others are missed out completely. Closure of viable businesses that may be facing...
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September 4, 2018
الأزمة التركية: التأثير على مجلس التعاون الخليجي
Turkey has been making headlines these past few weeks due to the massive rate at which the Turkish currency, Lira, has been depreciating against the dollar. The economy is under stress with the International Monetary Fund (IMF) downgrading the growth forecasts from 7.1% in 2017 to 4.4% in 2018 and 4.0% in 2019. Inflation levels are reaching record highs to an annual rate of 15.9 percent in July with the Lira depreciating over 40% against the U.S dollar so far...
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July 17, 2018
عمان تشهد دفعة في صادراتها غير النفطية
This article was originally published in Oman Economic Review magazine. Oman´s economy is known for being highly dependent on export of Oil & Gas as it contributes to 69 percent of its total export. However, over the years, Oman’s export market is witnessing a substantial increase in non-oil exports contribution. Some of the key points addressed in this article are about the recent trends in non-oil Exports, historical data analysis, major contributing partners, and the reasons behind the surge in non-oil...
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July 12, 2018
لعبة (سيسو) للسيولة السعودية
This article was originally published in Forbes Middle East. The advantages of the U.S dollar peg for Saudi Arabia have been multi-fold. It has resulted in stable export revenues, reduced transactions costs and a simple yet disciplined macroeconomic policy. This peg is especially important for Saudi Arabia as despite certain measures to diversify, their economy is dependent on oil and gas and connected activities. The oil price plunged in mid-2014, and the currency peg has been under pressure since then....