Fitch Solutions predicts that construction in the Middle East and North Africa (Mena) will see a growth rate of 5% in 2023, outstripping the global rate of 2.3%, thanks to high oil prices, burgeoning project pipelines, and what it called “impending disinflation in materials prices”.
Libya, Egypt, and Iran will see the fastest growth rates in the region this year, while Qatar will have one of the slowest, at 1.7%, with the conclusion of the World Cup.
Fitch forecasts annual average Brent at $95/bbl for 2023, down from $99 in 2022 but still well above break-even prices among Mena countries.
It said $95 exceeded break-even prices in Oman ($75), Saudi Arabia ($66.8), and the UAE ($65.8), allowing oil exporters to spend more on infrastructure.
Libya’s predicted 13.5% growth is partly a rebound from -15.5% growth in 2022, Fitch said, but added that a rebound in oil production during 2023 will boost its economy.
Egypt’s expected 9.0% growth reflects ongoing investment in infrastructure, including work on the New Administrative Capital.
Construction in Iran is expected to grow 8.4% this year, but that figure is contingent on the revival of the Iran nuclear deal in the first half of the year. Fitch asserts a 55% probability of that happening.
If it did, Iran could sell more hydrocarbons to fund more public investment, and foreign private investors might return.