- We at Fitch Solutions forecast that the Central Bank of Kuwait (CBK) will increase its policy rate from 2.75% currently to 3.50% by the end 2022.
- Stubbornly elevated inflation and rising pressures on the dinar will prompt authorities to hike by the same amount as the US Federal Reserve in coming months after having adopted a more accommodative monetary policy so far this year.
- The CBK will likely dilute its tightening cycle in three policy rate hikes of 25bps each to smooth the impact of higher borrowing costs on the non-oil economy.
At Fitch Solutions we think that the Central Bank of Kuwait (CBK) will bring
- We at Fitch Solutions anticipate that the BoI will hike its policy rate from 2.00% currently to 3.10% by the end of the year.
- Higher-than-expected inflation and a robust growth environment will provide impetus for policymakers to hike more aggressively than we had previously anticipated in coming months.
- We believe the BoI’s hiking cycle will end in 2022.
- Risks to our outlook are skewed to the downside. Early indicators of weaker growth in 2023 could prompt a less aggressive hiking cycle in coming months.
At Fitch Solutions we expect the Bank of Israel (BoI) will increase its policy rate from 2.00% currently
Key View: The expansion of Alghanim Industries’ furniture and interiors retailer, Safat Home, points towards a level of opportunity in Kuwait’s household goods market. Real gains in income in 2021 and 2022 push home-conscious consumers to update and renew their home furnishings among other household purchases. High per capita income and large expatriate population signal the higher range of price points businesses could utilise in this market.
In May 2022, Alghanim Industries opened their higher-end Safat Home Boutique in the Assima Mall, in Kuwait. The expansion of the brand is part of wider trend within the household goods
- At Fitch Solutions we forecast Lebanon’s inflation will average 178.0% in 2022 up from 154.8% in 2021, making it the second highest rate globally after Sudan.
- This marks an upward revision from our previous forecast of 155.7%, as we now foresee stronger inflationary pressures in H222 from the adjustment of the telecommunication, port and customs tariffs.
- In 2023, we expect inflation will ease to 60.0% as base effects from the removal of subsidies will fade.
At Fitch Solutions we expect average inflation in Lebanon will accelerate from 154.8% in 2021 to 178.0% in 2022. This marks an upward revision from our previous
Key View: Israel boasts a strong coffee culture and a vast selection of coffee-based beverage is on offers for its domestic consumers. Trade data indicates a shift in consumer preferences towards roasted coffee and coffee blends, over raw beans and single-origin coffee. We believe innovations, such as subscription coffee offerings can open up opportunities for coffee franchises.
Soft And Hot Drink Spending Overview
In 2022, we forecast consumer spending on soft and hot drinks in Israel to reach ILS15.9bn (USD4.7bn) and project it to grow at a rapid compound annual growth rate (CAGR) over the next five years of 5.5% CAGR
- Lebanon’s first economic expansion in four years will support medical devices demand in the short term driven by private consumption and recovering tourism in 2022.
- Increasing inflation will disproportionately affect the majority share of the population, reducing access to medical devices in the medium term.
- A final agreement with the IMF fund will continue to face headwinds in the run up to presidential elections, further limiting necessary imports of essential medical devices.
Despite previous economic unrest, Lebanon’s real GDP is expected to grow by 3.5%, the first expansion in four years. Despite conflict in Ukraine
- We have a positive outlook for consumer spending in 2022 and 2023, with real household spending forecast to grow 6.8% y-o-y and 2.6% y-o-y respectively. This growth in spending will mainly be supported by the lifting of Covid-19 related restrictions and elevated oil prices, keeping unemployment low and stable.
- The most recent high frequency data indicate that consumer spending has been increasing in recent months. This trend will continue over the remainder of 2022 and into 2023 as economic activity increases and tourist arrivals gradually recover.
- We highlight several risks to outlook over 2022 and into 2023, including
- We at Fitch Solutions expect that Qatar’s current account surplus will widen from 14.3% of GDP in 2021 to 21.4% of GDP in 2022, slightly above our previous forecast of 20.8%.
- The large surplus will be mostly driven by elevated global oil and natural gas revenues, paired with higher services exports during the FIFA World Cup in November and December 2022.
- Qatar’s stockpile of FX reserves will continue to rise from USD42.0bn in 2021 to USD44.8bn in 2022, while import cover will remain above the pre-pandemic 10-year average.
We at Fitch Solutions believe that Qatar’s current account surplus will widen from 14.3% of GDP in