Oman and Yemen Country Risk Report

Published 22 July 2015 | Quarterly

  • 64 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
$1,195.00
Oman and Yemen Country Risk Report

Core Views

  • We expect the formation of a fragile federalised state in Yemen, and the political situation will remain highly unstable over the coming decade. While not our core view, we flag significant risks of a return to civil war and a de-facto break-up of the state.

  • The economic outlook is uninspiring, with growth remaining sluggish over the 2015-19 period. Our core scenario sees business activity continuing to be negatively impacted by civil unrest, while persistent attacks on the country's hydrocarbon infrastructure will weigh on exports.

Key Risks To Outlook

  • Any further disruption to oil or gas exports would weigh heavily on the external position. Yemen's current account dynamics remain precarious; with minimal inflows of capital on the financial account, a further uptick of instability would see the rial coming under unsustainable depreciatory pressure.

  • International donors and the Yemeni government will be unable to substantially ameliorate the dramatic humanitarian situation in the country.

Macroeconomic Forecasts (Yemen 2013-2016)
Indicator 2013 2014e 2015f 2016f
National Sources/BMI
Real GDP growth, % y-o-y 6.6 1.1 -4.3 -3.8
Nominal GDP, USDbn 29.9 33.1 34.8 33.0
Consumer price inflation, % y-o-y, eop 8.1 9.5 12.0 12.0
Exchange rate YER/USD, eop 215.13 215.00 230.00 260.00
Budget balance, % of GDP -8.3 -8.2 -11.2 -10.0
Current account balance, % of GDP -5.1 -6.7 -12.6 -13.9
Executive Summary - Oman
11
Core Views
11
Key Risks To Outlook
11
Chapter 1
13
SWOT Analysis
13
Domestic Politics
14
Risks Rising Despite Qaboos' Return
14
TABLE: Political Overview
14
TABLE: FRONTRUNNERS FOR THE SUCCESSION
15
Long-Term Political Outlook
16
Royal Succession: Who Is Next In Line-
16
Chapter 1
19
SWOT Analysis
19
Economic Activity
20
Growth Slowing As Oil Fall Hits
20
TABLE: Economic Activity
20
TABLE: GCC - REAL GDP GROWTH, % CHG Y-O-Y
21
TABLE: Selected Infrastructure And Industrial Projects
21
Fiscal Policy
23
Increasing Momentum For Omani Islamic Finance Industry
23
TABLE: Fiscal Policy
23
TABLE: MENA - GOVERNMENT SPENDING AS % OF GDP, 2014
24
Banking Sector
25
Lower Oil Prices Create New Risks
25
Chapter 1
27
The Omani Economy To 2024
27
The Next Episode: Shifting Away From Oil
27
TABLE: Long-Term Macroeconomic Forecasts
27
Chapter 1
29
SWOT Analysis
29
Operational Risk
30
tABLE: Oman - Operational Risk
30
Legal Environment
31
TABLE: Middle East and North Africa - Legal Environment Risk
32
Costs Of Labour
35
TABLE: MENA - Labour Cost Risk
35
TABLE: Employing workers in Oman
36
Executive Summary - Yemen
39
Core Views
39
Key Risks To Outlook
39
Chapter 2
41
SWOT Analysis
41
Domestic Politics
42
Perfect Storm To Result In Political Paralysis
42
TABLE: Political overview
42
TABLE: Summary Of Political Situation
43
Long-Term Political Outlook
44
Federalised State To Emerge Amidst Protracted Instability
44
Chapter 2
49
SWOT Analysis
49
Economic Activity
50
Bleak Economic Outlook To Worsen
50
TABLE: Economic Activity
50
Fiscal Policy
51
Perilous Fiscal Position As Oil Revenues Collapse
51
TABLE: Fiscal Policy
52
Islamic Finance
53
UAE To Cement Position As Regional Hub
53
Chapter 2
57
The Yemeni Economy To 2024
57
Bleak Outlook As Energy Exports Contract
57
TABLE: Long-Term Macroeconomic Forecasts
57
Chapter 3: BMI Global Assumptions
59
Global Outlook
59
Softening Growth Picture
59
Table: Global Assumptions
59
Table: Developed States, Real GDP GrowtH, %
60
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
60
Table: Emerging Markets, Real GDP Growth, %
61

The Oman and Yemen Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Oman, Yemen. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Oman, Yemen's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.

Key Uses

  • Forecast the pace and stability of Oman, Yemen's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Oman, Yemen's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Oman, Yemen, including currency volatility, the commodity price boom and protectionist policies.

The Oman and Yemen Country Risk Report by BMI Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Oman, Yemen' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Oman, Yemen through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Oman and Yemen Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Oman, Yemen and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Oman, Yemen, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Oman, Yemen over the next 5-years?

BMI's Oman, Yemen country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Oman, Yemen Market - Political Strengths, Weaknesses, Opportunities and Threats facing Oman, Yemen.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Oman, Yemen's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Oman, Yemen’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Oman, Yemen's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Oman, Yemen?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Oman, Yemen against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Oman, Yemen’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

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