The non-oil growth of the countries that belong to the Middle East, North Africa, Afghanistan and Pakistan region (Menap) is expected to increase to about 2.6 percent in 2017 from 1.1 percent in 2016.
Giving a brief on IMF”s economic outlook for the Middle East and Central Asia countries on the sidelines of the IMF-World Bank annual meeting, Jihad Azour, Director, Middle East and Central Asia Department, IMF has said the detailed discussions on the macroeconomic forecasts for the region will be held when IMF launches its Regional Economic Outlook in Dubai on October 31, and in Almaty on November 1.
“Although the global economy is strengthening, the growth outlook for Menap countries remains subdued owing to the continuing adjustment to low oil prices in oil exporting countries and regional conflicts. However, this overall assessment masks important differences across oil exporting and importing countries”, he said.
Growth in Menap oil exporters is expected to bottom out at 1.7 percent in 2017, held back by the agreed cut in oil production under the Opec-led agreement. Jihad said the growth in oil importers in the region is expected to accelerate to 4.3 percent this year, well above 3.6 percent outturn in 2016, supported by stronger domestic demand, structural reforms, and the current upswing in the global economy.
Over the medium term, growth is anticipated to accelerate gradually in most Menap economies, but it will generally remain below what is needed to effectively tackle the high level of unemployment in the region and raise standards of living. Against this back drop the policy priorities for Menap countries need to make growth stronger, more inclusive, and job-rich to improve living standards and ease social tensions. A critical mass of structural reforms, including improving the investment climate, is needed to take advantage of the current window of opportunity provided by the stronger global economy. Menap oil exporters also need to accelerate efforts to diversify their economies away from oil and translate their ambitious visions into specific well-sequenced measures that can be implemented.
High fiscal deficits and/or public debt require a continued focus on consolidation. The projected fiscal deficit is 5.2 percent of GDP in Menap oil exporters and 6.6 percent of GDP in Menap oil importers, and average public debt remains above 80 percent of GDP in oil importers. The pace and composition of adjustment should be tailored to country circumstances, but needs to protect priority social and growth-enhancing spending.
