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Oil weighs heavily on MENA growth forecast: IMF

A placard announcing the 2017 Annual Meetings adorn the World Bank Headquarters in Washington, DC, on Monday. (AFP)
DUBAI: A massive slide in the economic growth of Middle East top oil exporters is weighing heavily on the outlook for the entire region, the International Monetary Fund said on Tuesday.
“Fuel exporters are particularly hard hit by the protracted adjustment to lower commodity revenues,” the IMF said in its World Economic Outlook for October.
Iran’s growth is forecast to slide to 3.5 percent this year down from a strong 12.5 percent in 2016.
Iraq’s economy, which experienced healthy 11 percent growth in 2016, is expected to fall into negative territory and shrink by 0.4 percent this year.
The Saudi economy, the largest in the region, is forecast to end 2017 flat — down from 1.7 percent growth last year.
Saudi Arabia, Iraq and Iran are the top oil producers and exporters in the Middle East. Riyadh is the world’s top oil exporter.
Kuwait’s economy is projected to shrink the most among oil exporters, by 2.1 percent, while the economies of the UAE and Algeria will grow at a modest rate, the IMF said.
In all, the growth of Middle East and North Africa (MENA) oil exporters Iran, Iraq, Algeria and the six Gulf Cooperation Council (GCC) states is forecast to end this year at 1.7 percent from 5.6 percent in 2016.
MENA growth as a whole is projected to more than halve in 2017, from 5.1 percent to 2.2 percent, “on the back of a slowdown in the Islamic Republic of Iran’s economy after very fast growth in 2016 and cuts in oil production in oil exporters,” the IMF said.
It projected the price of oil to average $50.3 a barrel in 2017, higher than the previous year, but will remain in the 50s until 2022.
The diplomatic rift between OPEC member Qatar — also the world’s top exporter of liquefied natural gas — and a Saudi-led Arab bloc has not affected oil and gas markets, as Qatar’s exports have continued, the IMF said.
However, the report warned of the impact of ongoing conflicts, both domestic and regional.
“Internal and cross-border conflict in parts of the Middle East still weighed on economic activity,” it said.

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