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Citi Research unveils new quarterly MENA Projects Tracker.

There is $2.5 trillion-worth of projects currently underway in MENA, according to Citi Research. Around $1.4 trillion of these are in the execution phase, $600 billion are in the pipeline at a relatively advanced stage, and the remainder are in the very early stages of development.

The vast majority of projects are in the GCC, with almost $2.2 trillion worth underway there (87 per cent of the MENA total). Saudi Arabia and the UAE together account for almost 60 per cent of total projects while projects underway account for a relatively small share of economic activity in non-oil producing countries in the region, with the exception of Jordan, where projects underway represent over 130 per cent of GDP.

The greatest concentration of projects is in the real estate sector, with over $1 trillion underway there. Within this sector, community development, economic and industrial zones account for the majority of the spend. Given the long-term nature of these projects, Citi Research believes the large project values (often in the tens of billions of US dollars) tend to exaggerate the actual spend in any given year.

There are also significant concentrations in the infrastructure, oil & gas, and power & water sectors, where the relatively short execution time frame suggests a relatively higher annual spend.

A breakdown by country shows some interesting sectoral biases. For example, there is a heavy bias in the UAE towards real estate projects, while infrastructure projects dominate in Qatar. The oil & gas sector is of greatest significance in Algeria, while Jordan is spending most on power & water. Egypt is the only non-GCC country with projects underway in excess of $100 billion, and ranks fofth in the region by value of projects.

Projects underway in Bahrain, the UAE and Oman are valued at over 150 per cent of current GDP, providing significant potential stimulus to economic growth. The extent to which this potential is fulfilled depends on such factors as execution, the timeline of the projects, the nature of the projects, and so on.

Despite ranking highest in terms of absolute project value, Saudi Arabia ranks lowest among the GCC countries in terms of value relative to GDP, indicating the relatively weak stimulus projects are giving the economy.

The Maghreb countries lag their regional peers in terms of project-driven economic stimulus, with the value of projects underway there typically below 20 per cent of GDP.

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Publication:CPI Financial
Geographic Code:7UNIT
Date:Apr 3, 2014
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