EconSource: Saudi Arabia Says No Need for Oil Summit

Saudi Arabia sees no need to hold a summit of oil producing countries’ heads of state if such discussions would fail to produce concrete action toward defending oil prices, sources said Thursday. The comments followed a meeting of Gulf Arab oil ministers with Qatar’s Emir in Doha, at which a Venezuelan proposal for an Organization of Petroleum Exporting Countries (OPEC) and non-OPEC summit was discussed. Sources said Saudi Arabia believes it is best not to interfere in the market presently. An OPEC source said that failure to produce a concrete outcome would have a negative impact on oil prices. Gulf OPEC members opposed holding an early meeting and show no sign of changing strategy. Meanwhile, Gulf oil sources see no sign of Saudi Arabia wavering when other OPEC members, such as Iraq, are raising production. On Friday, oil prices fell more than 2 percent on after Goldman Sachs and Germany’s Commerzbank slashed their crude forecasts. [Reuters, 9/10/2015]

Iraq’s bond drops to lowest in six years on oil revenue squeeze
Iraq’s only international bond declined to its lowest level since September 2009, as Prime Minister Haider al-Abadi said oil prices have dropped below the minimum level to cover the cost of crude oil production. The fall in oil prices comes as Iraq plans to tap the international market for the first time in a decade. Iraq plans to raise $6 billion through bond sales in order to ease its a budget shortfall. However, investors warn that Iraq will have to pay significant yields to raise a sizeable amount. “There is no way [Iraq] can get [$6 billion] in one tranche,” said one investor. “I imagine the maximum will be $2 billion.” Another investor said that even raising $2 billion could be a struggle. “In order to [raise] $2 billion, [Iraq] will need to pay quite a substantial amount,” he said. [Bloomberg, 9/10/2015]

Tunisia development plan aims to raise growth to 5 percent
Tunisia’s five-year economic plan for 2016-2020 aims for a growth rate of 5 percent. The plan, formulated by the Ministry of Development, International Cooperation, and Investment, was released on Wednesday and submitted to government coalition parties. The plan aims to target “economic efficiency based on innovation and partnership, social inclusion, and sustainable development.” However, the ambitious growth rate requires several major reforms and a significant increase in both public and private investment. The plan also aims to reduce inflation to 3.6 percent and decrease the unemployment rate by 2020. On Thursday, TAP reported that IMF Managing Director Christine Lagarde urged Tunisia to focus the country’s 2016 budget on growth and encouraging investment. [Zawya/TAP, 9/10/2015]

Egypt’s economy needs investment to boost reserves and growth
Experts say Egypt needs to boost investment and bring in foreign capital to avoid a looming cash crunch. Billions of dollars in debt repayments are due, foreign currency reserves fell to a six month low in August, and Finance Minister Hany Kadry Dimian said this week that foreign direct investment is not growing as fast as hoped. Experts say if the government does not act quickly, the investment needed to realize its ambitious plans may not materialize in time. Experts recommend letting the currency devalue against the dollar to make exports more competitive, shore up foreign reserves, and alleviate investor uncertainty. Implementing a planned value-added tax this month would help bring the budget into line, as would a fresh bond issue similar to the one last June that raised $1.5 billion. [AP, 9/11/2015]

Also of interest
OPEC sees weak oil prices through 2015 | WSJ
As oil slump stings, Saudi hubs ready for privatization | Bloomberg
Oman to rationalize spending amid slump in oil prices | Gulf News
Major challenges facing Egyptian banks, CBE | DNE
Morocco ranks low on inclusive growth, development | Morocco World News
Turkey’s current account gap rises to $3.15 billion in July | BGN News
Turkish lira headed for longest stretch of weekly losses | Bloomberg