The Institute of International Finance (IIF) indicated that non-oil economies of the MENA region might

face at best a modest recovery in 2013 as they struggle with weak growth, relatively wider fiscal and
current account shortfalls as well as rising unemployment.

The IIF added that higher subsidy-related spending, coupled with pressures to enhance public sector
wages, is exerting pressures on fiscal accounts of non-oil economies in the MENA region. The Institute
fears that the promised concessional external financing may not be sufficient to plug financial shortages
and consequently secure macroeconomic stability. Meanwhile, monetary and fiscal policy buffers have
diminished, and private investors are still in a wait-and-see mode.

The main risks for MENA oil importers stem from ideological tensions, real or potential social unrest, and
fiscal slippages. Foreign investors need more clarity as to the economic policy frameworks to be adopted
by the new governments in the region, as per the IIF.

Non-oil economies in the MENA area would grow by 1% in real terms this year, compared with 1.5% in
2011. The MENA region's oil exporters by contrast reported a combined economic expansion of 5.7%
seen in 2012, up from 4.5% last year.

The six GCC countries, plus Algeria, Iraq, and Libya, continue to post strong growth, while fiscal and
current account surpluses have been buoyed by higher oil production and a strong rebound in oil and
gas production in Libya. For the region's oil exporters, the main risk is the possibility of much lower oil
prices for any sustained period, given the strong build-up in spending plans and high public expectations
of continued prosperity.

Source:
Group Research Department
Bank Audi sal - Audi Saradar Group
Bank Audi Plaza, Omar Daouk Street, Bab Idriss