Global hotel consulting firm HVS projected the average hotel occupancy rates in most Gulf Cooperation Council (GCC) countries to increase in the 2018-27 period from the previous 10 years. It expected the average occupancy rate at hotels in the UAE to improve from an average of 73% in the 2008-17 period to 75% in the 2018-27 period, the rate at hotels in Saudi Arabia to increase by eight percentage points to 69% in the coming 10 years, and the occupancy rate at hotels in Oman to grow from an average of 61% in the past 10 years to 66% in the 2018-27 period. It also forecast the occupancy rate at hotels in Kuwait to increase from an average of 58% in the 2008-17 period to an average of 62% over the coming 10 years, while it anticipated the rate in Bahrain to expand by five percentage points to an average of 60% over the 2018-27 period. Also, it projected the average occupancy rate at hotels in Qatar at 63% between 2018 and 2027, nearly unchanged from 64% over the past 10 years. In parallel, HVS projected the average daily rate per room at hotels in Saudi Arabia to outperform the rate of hotels in other GCC economies, and to rise from an average of $191 in the 2008-17 period to $225 over the coming 10 years. Further, it expected the revenue per available room (RevPAR) at hotels in Saudi Arabia to post the highest rate in the region, increasing from an average of $116 between 2008 and 2017 to $155 in the 2018-27 period. It anticipated the RevPAR at hotels in Qatar to follow with an average of $117 over the 2018-27 period, then Oman with $116, Kuwait with $115, the UAE with $109, and Bahrain with $102.
Source: HVS Research

The Institute of International Finance reduced its forecast for non-resident capital inflows to emerging markets (EMs) to $1.14 trillion in 2018 from a May projection of $1.21 trillion, and compared to inflows of $1.26 trillion in 2017. It expected non-resident capital inflows to be equivalent to 3.7% of EM's GDP this year, down from 4.4% of their GDP in 2017. It attributed the anticipated decline in capital flows to lower portfolio inflows, which it projects at $310bn in 2018, down from a May forecast of $351bn. Specifically, it lowered its expectations for debt inflows to $246bn in 2018 from $255bn previously, and for equity flows to $64bn down from an earlier forecast of $95bn. It projected foreign direct investment at $504bn in 2018, down from a May forecast of $523bn; while it expected other investments in EMs, mainly banking related flows, at $325bn in 2018, down from a previous forecast of $338bn. It said that downside risks include the intensification of trade tensions between the U.S. and China, faster-than-expected increase in U.S. policy rates, a stronger US dollar, policy uncertainty in China, and delayed or inadequate policy response in EM countries.

Further, the IIF forecast non-resident capital inflows to Emerging Asia to grow from $725bn in 2017 to $764bn in 2018, mainly due to a rise of $143bn in inflows to China. In contrast, it projected inflows to Latin America to decline from $235bn in 2017 to $199bn this year, those to the Middle East & Africa region to regress from $166bn last year to $149bn in 2018, and inflows to Emerging Europe to fall from $134bn in 2017 to $26bn this year. 
Source: Institute of International Finance

Credit Suisse indicated that the Turkish authorities' monetary and fiscal measures, along with an improvement in risk sentiment towards emerging markets and a reassessment of the market's exaggerated risk perception about the Turkish banking sector, have helped reverse the depreciation pressure on the Turkish lira. However, it considered that it is too soon to be optimistic about the policy outlook, given Turkey's weak institutions and track record of inappropriate policy-making. It noted that any political pressure to push for premature monetary policy or fiscal easing would trigger an adverse reaction from the markets. 

Credit Suisse estimated that the depth and duration of Turkey's economic recession depends on the country's access to external funding, which, in turn, is contingent on the steady implementation of prudent policies and the authorities' tolerance for a contraction in economic activity over the next few quarters. It anticipated the economic slowdown and rebalancing, which started before the August turmoil, to be more pronounced in coming quarters. As such, it projected real GDP growth to decelerate from an estimated 3.5% in 2018 to 0.7% in 2019. Further, it anticipated the inflation rate to increase from an average of 15.6% in 2018 to 18.6% in 2019.

In parallel, Credit Suisse estimated that the banking sector and non-bank corporates have enough liquidity in foreign currency to meet their foreign currency liabilities over the next six to 12 months. Further, it said that the banking sector's Tier-One capital ratio would remain around the current prudential limits under a scenario whereby the non-performing loans (NPLs) ratio rises from 3% currently to 10.5%, and the exchange rate stands at TL6.5 against the US dollar. It said that a loss of policy credibility and the tension between Turkey and the U.S. constitute the main risks to the outlook in coming months.    
Source: Credit Suisse