The International Monetary Fund (IMF) has raised the economic forecasts of all the GCC countries for 2018 and 2019 in its latest World Economic Outlook report.
The IMF attributed the upward revision to a pick-up in non-oil economic activity and a projected increase in crude oil production in line with the revised Organisation of Petroleum Exporting Countries Plus (Opec+) agreement.
The IMF has observed that the oil exporters from the Middle East region, with the exception of Iran, are expected to have a positive impact on their economic growth in 2018 and 2019. In the GCC, Oman’s 2019 estimated GDP growth of 5.05 per cent is the highest in the region.
Bahrain, which received $10 billion (Dh36.73 billion) in financial aid last week from Saudi Arabia, Kuwait and the UAE, has embarked on a fiscal stabilisation programme. The IMF has projected a 3.5 per cent GDP growth this year and 2.59 per cent in 2019.
A package of reforms announced by Bahrain’s government last Thursday is targeting 800 million Bahraini dinars ($2.12 billion) in annual savings, in addition to eliminating its budget deficit by 2022. Manama had projected a $3.5 billion budget deficit in 2018.
The IMF concluded its Article IV Consultation on the UAE and said the economy continues to adjust to a prolonged decline in oil prices since 2014. With oil production and government spending set to rise, overall growth is projected to strengthen this year and the next.
In the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, which includes both oil-importing and exporting economies, growth is projected to increase from 2.2 per cent in 2017 to 2.4 per cent in 2018 and to 2.7 per cent in 2019, stabilising at about 3 per cent in the medium term — a sizeable downward revision compared with the April 2018 WEO forecast.
The downward revisions reflect to an important extent the worsening of growth prospects for Iran, following the re-imposition of US sanctions. The economy is now forecast to contract in 2018 (minus 1.5 per cent) and in 2019.
Source Credit: Gulf News