Several Middle Eastern countries are leading the vaccination rollout, with the UAE, Israel, and Bahrain among the top in the world in terms of the rate of inoculations per capita. The pace of inoculations for Egypt has accelerated in the region, as more vaccines are getting approved and delivered. Morocco has exceeded expectations, having inoculated 3.2 million citizens with a single dose in a short time frame. Because of the lower infection rate and rapid inoculation pace, Israel started to ease some COVID-19 restrictions. 

Egypt: In addition to public investments, energy exports and mildly recovering consumer spending will boost growth in 2021 

Inoculations for Egypt will gradually accelerate, but only achieve herd immunity by the end of the first quarter in 2022. Despite ordering 100 million doses, Egypt has received less than 10% of its order, enough to vaccinate 5 million citizens. The latest shipment of AstraZeneca doses (8.6 million) coupled with an additional 20 million doses from Sinopharm by the end of the first quarter will ensure vaccinations of front-line workers and senior citizens by April, further reducing the pressure on the healthcare sector, which has now eased to 40% ICU bed utilization. 

Saudi Arabia: The kingdom extends COVID-19 restrictions into March 

The Saudi economy contracted 3.8% YOY in the fourth quarter of 2020, bringing the 2020 average GDP performance to -4.1% YOY. This is slightly lower than our forecast of a 3.8% YOY contraction, mainly due to a lower-than-expected fourth quarter performance. The economy picked up slightly in December and early January; however, the rise in COVID-19 cases and the reintroduction of some restrictions will further weigh on activity in February and March, likely leading to a slow reopening from April/May onward. 

UAE: The country administered over 5 million COVID-19 vaccines by the end of February 

The Dubai Purchasing Managers’ Index fell to 50.6 in January from 51 in December. After a rise in tourist arrivals in December (mostly from the UK) and a rise in daily COVID-19 cases, the country increased some restrictions in early 2021. The fast pace of inoculation has also slowed slightly due to a deceleration of vaccine arrivals. However, we still expect partial normalization to begin in the second quarter of 2021, and for economic activity to pick up notably in the second half of 2021. 

Actions for Business Professionals: 

  • Businesses in Egypt should align with local partners on how to raise engagement with decision makers to maximize public demand and better position their value-added emphasis as public demand grows more price sensitive. 
  • Monitor plans for a Saudi oil production increase for April to anticipate the future trajectory of oil prices. 
  • Plan for the creation of a COVID-19 travel pass at the end of March that creates a digital system for test results and vaccine certificates. If adopted by major countries across the world, this could support the UAE’s efforts to successfully hold Expo, as well as attract more tourists this year. 

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