Casablanca - Fitch Group’s research firm BMI published a study on sectors in MENA that should outperform in the coming years albeit the mild macroeconomic outlook for the region.
Casablanca – Fitch Group’s research firm BMI published a study on sectors in MENA that should outperform in the coming years albeit the mild macroeconomic outlook for the region.
According to the study, the region should grow at a mild growth rate of 2.5% per annum over the next decade below an average growth rate of 3.7% per annum yielded over the previous one.
According to BMI research, “bright spots remain and several sectors are set for particularly strong growth”. Among the top six sectors to add to one’s watch list, is UAE’s infrastructure sector, which should benefit from substantial investment flows into Dubai’s and Abu Dhabi’s transport, energy and tourism sectors.
Furthermore, Dubai will host the World Expo 2020, which should also spur the construction sector. BMI foresees UAE’s construction sector value to reach AED 330.25 billion by 2026 vs. AED 177.88 forecasted for 2017. In addition, in the UAE, BMI believe that the healthcare sector should benefit from increased pharmaceutical sales, which should account for 0.76% of GDP by 2021 vs. 0.65% in 2015.
According to the paper, there should be an increased preference for patented drugs mainly for the treatment of cardiovascular diseases and oncology among other therapeutic areas.
The third sector that should perform well is the luxury sector in Iran thanks to a booming middle class and of course, the removal of economic sanctions which boost significantly the per capita consumer-spending outlook. In Egypt, natural gas production should soar during the coming years to stand at 66.5 bcm by 2010 vs. 44.3 bcm in 2015.
In Morocco, two sectors were selected by BMI as top sectors in the MENA region with a strong potential over the next decade:
First, the Autos sector with “vehicle production and net-exports to grow by an annual average of 18.5% and 24.8%, respectively over 2017-2021” thanks to many auto manufacturers attracted to Morocco for its logistical ties to Europe, West- and North-Africa, as well as the government’s pro-investment stance and political stability.
Second, the Power and Renewables sector with Morocco’s efforts to use imported liquefied natural gas (LNG) as a feedstock; and with Morocco heading towards becoming one of “the best markets for non-hydropower renewables investment in the MENA region over the coming decade”.
In 2016, natural gas accounted for 17% of total power generation in Morocco, while non-hydropower renewables accounted for 8%. BMI forecasts non-hydropower renewables generation to stand at 5.845 TWh by 2021 vs. 2.152 TWh in 2015.