Report: MENA borrowing to drop by 6% in 2018

Sovereign borrowing by the Middle Eastern and North African countries will decline by 6 per cent in 2018, Standard & Poor’s (S&P) Global Ratings announced today in a report.

S&P report, which was distributed in UAE’s Dubai, showed that 13 MENA sovereign countries are set to borrow $181 billion in long-term commercial loans this year, compared to $192 billion in 2017. This will register a debt sales decline of $11 billion.

“We expect that about 40% of MENA sovereigns’ $181 million of gross borrowing this year will go toward refinancing maturing long-term debt, resulting in an estimated net borrowing requirement of $108 billion,” S&P pointed out.

Read: Egypt debt to UAE oil company drops to $228m

“The decline is chiefly resulting from the fiscal consolidation measures that have been placed across all the Gulf Cooperation Council (GCC) countries, in addition to the higher oil prices which will likely reduce the GCC sovereigns’ funding needs,” the report read.

Egypt, the ratings agency added, will remain the largest borrower with $46.4 billion, amounting to 26 per cent of the region’s gross commercial long-term borrowing. Iraq comes in second with $35 billion or19 per cent of the total, followed by Saudi Arabia with $31 billion or 17 per cent of the total.

“We expect MENA sovereigns’ absolute commercial debt will increase by $21 billion to about $764 billion at year-end 2018, up 3 percent from 2017,” S&P projected.