Saudi Foreign Minister Adel al-Jubeir said Saturday that the kingdom’s financial deficit this year is manageable, despite the low oil prices and that its growth rate will remain strong. He emphasized Saudi Arabia’s accumulation of foreign reserves over the past decade, saying, “We have no doubt that the growth rates in our economy will continue and the financial health of the kingdom will remain as strong as it has been.” He explained recent high levels of spending, noting that Saudi Arabia is “on the tail end of a huge infrastructure development program in terms of airports, roads, hospitals, highways, [and] housing.” On Friday, Standard & Poor’s (S&P) downgraded its ratings for Saudi Arabia’s long-term foreign and local currency sovereign credit, citing a “pronounced negative swing” in the government’s budget balance. S&P said it could further lower the ratings within the next two years if Riyadh fails to achieve a “sizable and sustained reduction in the general government deficit.” The Finance Ministry criticized the decision, describing it as reactionary and driven by fluid market conditions rather than the economic fundamentals. [AP, Reuters, 10/31/2015]

Tunisia aims for foreign investment jump with new law
Tunisia hopes to double annual inflows of foreign investment over the next five years by pushing through legal reforms and reducing industrial unrest, according to Investment Minister Yassine Brahim. He said Tunisia plans to issue a new investment law early next year to “help the pace of investment with incentives and by reducing administrative procedures and bureaucracy.” The new law will contain financial incentives for investors, particularly those intending to export goods from Tunisia and invest in the country’s interior. The law will also give foreign investors more flexibility to transfer funds out of the country. “With new measures and economic reforms, we aim to double foreign investments in 2020 to $2.5 billion,” Brahim said. Meanwhile, Tunisia’s cabinet examined a number of draft development bills on Friday. On Saturday, the World Bank said it will launch consultations on a new strategy for support for Tunisia. [Reuters, 11/1/2015]

Moody’s says Turkey’s election results reduce near-term uncertainty
Ratings agency Moody’s said that the AK Party’s (AKP) victory in Turkey’s elections on Sunday election have reduced near-term political uncertainty. However, the agency noted that the impact of the election results on sovereign credit quality will depend on the AKP’s strategy to combat low growth, high inflation, and volatile capital flows. Moody’s said banks in Turkey still face elevated risk aversion towards emerging markets and elevated geopolitical risks despite the decrease in political uncertainty. On Monday, the Turkish lira and the Istanbul stock market rose sharply, with the lira rising 3 percent against the dollar after falling by 25 percent this year. [Reuters, 11/2/2015]

Sisi says Egypt’s natural gas crisis will end this month
Egypt’s President Abdel Fattah al-Sisi promised on Sunday that the country’s natural gas shortage will end this month. Egyptian factories that rely heavily on gas to generate power have been struggling due to a shortage of gas supplies, leading some factories to halt production. “I promise all the investors that operate their factories with natural gas that they will not face any more shortages by the end of November,” Sisi said. Trade and Industry Minister Tarek Kabil said earlier on Sunday that production at steel firms had been almost halted for the past four months due to gas shortages, but said that they had resumed production last week. On Friday Germany’s Siemens said it could win an expansion of its record $8.8 billion power deal with Egypt. Sisi also promised a drop in the price of basic commodities and said that the armed forces and the state will work to provide goods at lower prices. Meanwhile, on Monday Egypt’s Finance Ministry said the country’s budget deficit dropped to 11.5 percent from 12.2 percent of gross domestic product in fiscal year 2014/2015. [Reuters, Ahram Online, 11/1/2015]

Libya’s eastern central bank chief says bankruptcy is far off
Libya’s eastern Central Bank Governor Ali al-Herbi said that while low oil revenues are detrimental, the possibility of bankruptcy remains remote. He said that Central Bank revenues are about $8 billion per year, a fraction of the levels achieved prior to the 2011 revolution, and that the oil sector is operating at 15 percent of capacity. Nevertheless, al-Herbi said “bankruptcy is far off,” claiming that Libya’s foreign reserves can keep the country’s economy afloat. He also said Libya is unlikely to seek an international loan in the near future. “Central banks don’t go bankrupt,” he stressed. He also accused the Tripoli-based Central Bank Governor Sadeeq Elkaber of “implementing a corruption policy [that] is exacerbating the economic crisis.” The Tripoli Central Bank recently released a series of reports claiming that it has successfully cut spending on salaries and subsidies to decrease the budget deficit. [Libya Herald, Libya Monitor (subscription), 11/2/2015]

Also of interest
Saudi Arabia downgrade may contribute to Gulf debt repricing | Reuters
Saudi water tariff to rise starting next month | Reuters
Saudi consumer spending high despite oil slump | Bloomberg
OPEC oil output rises in October led by Libya, Saudi Arabia | Bloomberg
Iran to announce oil output rise at next OPEC meeting | Reuters
Bahrain picks four banks to arrange Eurobond | Reuters
US pledges nearly $100 million to support Syrian opposition | AP
Iraq’s October oil exports fall to average 2.7 million bpd | Reuters
Jordan unveils tax incentives to boost economy | Jordan Times
Lebanon launches $1.6 billion sovereign eurobond | TDS
Banque Misr to complete $250 million three-year loan in December | Reuters
Egypt’s gross domestic debt soars in FY2014/15 | Cairo Post
Ethiopia seeks to sign trade agreements with Egypt | DNE
Libya’s Tobruk government approves funding decisions | Libya Monitor (subscription)
Thousands protest utility prices in Morocco’s Tangier | Reuters
Turkey’s exports decreased 1.5 percent in October | Hurriyet