- Bank of America Merrill Lynch Global Research: 鈥淲ith a more entrenched current account surplus possible this year, FX reserves could increase.鈥�
- 鈥淩eforms are likely to broadly proceed, even at these levels of oil prices, although spending may increase further above baseline expectations.鈥�
LONDON: The 抖阴短视频n economy is in a 鈥渟weet spot鈥�, with higher oil prices allowing the Kingdom to boost spending while not having a significant impact on the country鈥檚 fiscal balance, according to Bank of America Merrill Lynch Global Research.
鈥淥ur meetings on 抖阴短视频 comfort us in our view that the economy is in a sweet spot. Higher oil prices are allowing the focus on boosting activity not to materially impact fiscal balances,鈥� the note said, published following the IMF and World Bank Spring meetings held in Washington DC this month.
鈥淲ith a more entrenched current account surplus possible this year, FX reserves could increase this year,鈥� the note said.
The bank forecasts the country will continue to push forward with its reform process regardless of the rising price of oil. Many of 抖阴短视频鈥檚 reforms are part of its Vision 2030 that aims to diversify the country鈥檚 economy away from its reliance on oil.
Brent oil reached a three-and-a-half year high on 19 April, hitting $74.74 a barrel.
鈥淩eforms are likely to broadly proceed, even at these levels of oil prices, although spending may increase further above baseline expectations,鈥� the note said.
The bank was also upbeat about Egypt鈥檚 economic prospects, noting that the country鈥檚 鈥渕acro stablization鈥� is continuing and that its reform program, which includes cutting fuel subsidies and reforming the tax system, remains 鈥渋ntact鈥�.
鈥淎uthorities are on track to achieve a small 0.2 percent of GDP primary surplus this fiscal year. The target is to bring the primary surplus to 2 percent of GDP next fiscal year, and maintain it there going forward,鈥� it said.