This Year, Next Year: MENA Mid-Year Forecast Report

GroupM MENA

MENA Advertising will decline -25% in 2020

MENA advertising spend declined by -5.8% in 2019 and will now decline further as it faces a dual shock, COVID-19 and the drop-in oil prices.

Advertising spend was $2,737Bn in 2019. Following the current downward trend, we have revised our forecasts to be $2,053Bn in 2020 and $2,320Bn in 2021. On a positive note, +13% growth is predicted in 2021 as advertisers adapt to economic conditions.

We have seen trade supply side impacted with disruptions across retail and hospitality sectors. At the same time, reduced demand for oil in China and India (the world’s largest consumers) led to cancellations of oil deliveries.

In Lebanon, the economic crisis continues to worsen, led by the banks’ sporadic behaviours, where depositors across the country are finding it impossible to gain access to dollar balances. Although capital controls have not officially been introduced, it seems banks have taken it upon themselves to conserve liquidity and capital by dictating what level of funds clients can withdraw or transfer abroad. Meanwhile, in Iraq, civil unrest has been blamed on the inadequacy of state services and the lack of jobs as a reason for public anger.

Looking at North Africa, there is a trend of trade deficit and the weakening of the currency in the face of a depreciation close to 30-40% against the dollar across Egypt and Tunisia.

As a consequence, the MENA region’s growth rate has been slashed by the World Bank for 2020. The rate for 2021 remains unchanged for now, though, whilst governments battle to contain the global pandemic. Our presumption is that we will see difficult macro-economic conditions in the year ahead.

 

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