Mubasher: Moody's Investors Service believes that the 2018 outlook for sovereign ratings in the Levant and North Africa region is broadly stable.

The outlook is reflecting the improved global growth dynamics, ongoing structural reforms, and winding-down of regional conflicts, according to a recent report.

Moody's expects growth in Egypt to accelerate from 4.2% in 2017 to around 5% by 2019 and 5.5% by 2021.

The ratings agency expects a slight consolidation in the deficit to 10% of the country’s gross domestic product (GDP) in 2018 and 8.5% in 2019.

It also forecasts GDP growth to pick up in Iraq, Jordan, and Lebanon in 2018 to 2.9%, 2.5%, and 2.8%, respectively.

Meanwhile, Moody's estimates a slight acceleration in economic growth in Tunisia to 2.8% in 2018 from 2.3% in 2017 based on demand, in particular from France and Italy, and improving investment incentives.

“However, the growth trajectories of Tunisia, Jordan, and Lebanon continue to face significant structural and external headwinds, despite the cyclical growth recovery,” the report indicated.

Moody’s expects a gradual reduction in the fiscal deficit for Jordan to 3.4% of GDP in 2018 and to below 3.0% of GDP by 2019 from about 3.7% in 2017.

Iraq is set to record a fiscal deficit of 4.7% of GDP in 2018 from 5.0% in 2017 and 14.1% in 2016 on the back of changes in oil revenues, which account for over 90% of total revenues.

In Morocco, the cyclical recovery is expected to moderate, with GDP growth at 3.5% in 2018 from 3.9% in 2017 due to a lower contribution to growth from the agriculture sector.

Morocco is also projected to reduce its deficit to 3% of GDP in 2018 from 3.5% in 2017.