IMF raises MENA growth forecasts for 2016 despite Brexit

'Modest recovery in oil prices' helps outlook, although global body downgrades regional forecasts for 2017
IMF raises MENA growth forecasts for 2016 despite Brexit
GCC money, GCC dollar peg, GCC finance
By Staff writer
Wed 20 Jul 2016 01:29 PM

A rebound in the price of oil is set to improve economic growth in the Middle East and North Africa from 3.1 percent to 3.4 percent this year, a revised forecast from the International Monetary Fund (IMF) has said.

"In the Middle East, oil exporters are benefiting from the recent modest recovery in oil prices while continuing fiscal consolidation in response to structurally lower oil revenues," the IMF said.

However, the global body also downgraded the region’s forecast for 2017 from 3.5 percent to 3.3 percent, citing “geopolitical tensions, domestic armed strife, and terrorism”.

For Saudi Arabia, the IMF retained its forecast of 1.2 percent growth for this year, and raised its forecast for 2017 by 0.1 percent to 2.0 percent growth.

In a recent report, the IMF also said that the oil price slide would cost almost $450 billion in lost energy exports to Algeria and the GCC countries, while their cumulative budget shortfalls would hit $900 billion by 2021.

From the global perspective, the IMF said that it had cut its forecast by 0.1 percent for this year and 2017, to 3.1 percent and 3.4 percent respectively, due to uncertainty caused by Britain’s decision to leave the European Union.

“This uncertainty is projected to take a toll on confidence and investment, including through its repercussions on financial conditions and market sentiment more generally,” the IMF said.

For the UK itself, the agency revised economic growth down by 0.2 percent this year to 1.7 percent, and by 0.9 percent in 2017 to 1.3 percent.

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