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Atradius publishes analysis of MENA markets

By CreditMan Monday, August 8, 2016

Trade credit insurer Atradius has published a new in-depth report on the Middle East and North Africa.

Designed to inform British businesses trading, or seeking to trade, in the region, the Country Report analyses political and economic risks within the region’s major economies as well as assessing the performance outlook for its industries.

With global business intelligence on 200 million companies and with experts around the world, Atradius is well positioned to identify key trading risks as well as opportunities for new business links.

Highlights of the report reveal:

  • Algeria: The UK is the fourth biggest export market for Algeria, accounting for 8.8% of its total exports. Atradius warns that Algeria’s economy is too dependent on the oil sector and needs to diversify further to create vital jobs. Government intervention, an underperforming banking sector, red tape and corruption still hamper foreign investment and private enterprise initiatives.

  • Egypt: Security issues have had a negative impact on tourism and the economy. Investments are being withheld and some companies have stopped production due to a lack of imported goods. However, the medium term outlook is more positive due to the discovery of large offshore gas fields.

  • Jordan: Economic growth is negatively affected by ongoing conflicts in the region. Trade flows with Iraq as a major export destination have decreased and tourism and investments are negatively impacted by security concerns. Growth is expected to rebound somewhat in 2016, helped by low oil prices and government infrastructure investment

  • Kuwait: Economic growth is expected to remain modest, at 1.1%, in 2016 due to lower oil prices and decreased oil production. However, investments in infrastructure will support economic growth. Diversification of the economy is high on the agenda.

  • Morocco: Economic growth is expected to slow due to a drought affecting the agriculture sector – which employs 40% of the country’s workforce. The development of industrial manufacturing, especially export-driven sectors such as cars, aeronautics and electronics, is attracting foreign investment.

  • Saudi Arabia: GDP growth is expected to slow to 1.7% in 2016, from 3.4% in 2015, primarily affected by decreased oil prices. Credit growth has decelerated and balance sheets have deteriorated. Support for economic activity comes from ongoing large investments in infrastructure (metro Riyadh) and new industrial projects such as the Sadara petrochemicals complex.

  • Tunisia: GDP growth in 2015 slowed to 0.8% as the fragile security situation affected the business environment and hurt the economy. In 2016, GDP is expected to grow to 2.4% however this rebound is heavily dependent on the security situation as any further deterioration could severely impact domestic demand and tourism.

  • United Arab Emirates: Commodity price volatility, especially steel metals and food, has negatively impacted traders and distributors who are facing liquidity / cash flow issues. They have either delayed payments to suppliers or, in some cases, shut down their businesses.

Richard Reynolds Head of Regional Brokered Sales and Commercial Birmingham at Atradius, said:

“When doing business overseas, it’s vital to not only have comprehensive information on your trading partner but also to be aware of the wider political and economic backdrop. Changes can bring risks to the trading environment and impact a businesses’ performance or ability to pay. Analysing wider trends can also help businesses to identify new opportunities to trade and facilitate business growth. That’s where Atradius steps in. As the export experts, Atradius offers real-time trading advice to customers to protect them from the risks of doing business wherever they are in the world.”

For a full suite of free country and economic reports, visit www.atradius.co.uk or follow @AtradiusUK on Twitter.