Egypt's economy gradually recovering after its 'Second Revolt'

Challenges such as large current account and fiscal deficits remain, but three years after the Arab Spring uprisings, the tide is turning in favour of the economies of North Africa, says London-based Capital Economics.

A gradual return to political stability in Egypt and Tunisia should support activity there, while exports are likely to pick up on the back of the modest recovery in the global economy, its analysts note, while expecting overall growth to gradually strengthen over the next couple of years.

Egypt's economy is gradually recovering following last summer's "second revolution", though a fresh outbreak of political unrest remains a risk. However, with the new government undertaking reforms, the outlook is brightening.

Growth in the Gulf region, meanwhile, is likely to slow as the past decade's boom in hydrocarbon production fades and fiscal policy becomes less supportive, the analysts say.
"The big picture is that growth in North Africa could surpass that in the Gulf come next year," Capital Economics reckons.

Here are some key highlights from the research firm's latest outlook report on the Middle East.