IMF: Gulf economy recovering but faces oil volatility

The IMF welcomed the imposition of value-added tax by Saudi Arabia and the UAE. (AFP)
Updated 13 November 2018
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IMF: Gulf economy recovering but faces oil volatility

  • ‘The growth outlook for oil exporters remains subject to significant uncertainty about the future path of oil prices’
  • Oil revenues for MENA exporters have increased by about $260 billion over the period 2016 to 2018

DUBAI: Economic growth in the energy-rich Gulf will recover in 2018 from a contraction last year but remains vulnerable to volatility in crude oil prices, the IMF forecast on Tuesday.
The global lender predicted that an overall energy price recovery from 2015-2016 lows would spur the economies of the six-nation Gulf Cooperation Council to grow by 2.4 percent in 2018 and 3.0 percent in 2019, after a contraction of 0.4 percent last year.
Grouping Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, the GCC states together pump over 17 million barrels per day and depend heavily on crude revenues.
But “the growth outlook for oil exporters remains subject to significant uncertainty about the future path of oil prices,” the IMF said in its Regional Economic Outlook for the Middle East and North Africa (MENA).
After their earlier extended recovery, oil prices have shed a fifth of their value in just one month, with Brent crude trading near its lowest price since April.
Growth in non-GCC oil exporters in MENA, which includes Iran, Iraq, Algeria and Libya, is projected to slow to 0.3 percent in 2018, from three percent the previous year, and pick up modestly to 0.9 percent in 2019, the IMF said.
“This largely reflects the expected impact of the re-imposition of US sanctions on Iran, which is likely to reduce Iranian oil production and exports significantly over the next two years at least,” the IMF said.
It projected Iran’s economy to shrink by 1.6 percent this year and 3.6 percent in 2019.
For oil-importing countries in MENA, growth is expected to continue at a modest pace of 4.5 percent in 2018, before dropping back to four percent next year, the IMF said.
This level of growth is not sufficient to create the required jobs for a region marred by instability and civil strife, it said.
Oil revenues for MENA exporters have increased by about $260 billion over the period 2016 to 2018.
This has mostly been due to a price rise generated by production cuts in nations belonging to OPEC, as well as non-OPEC producers.
The current account balance will turn from a deficit into a surplus and overall budget shortfalls will decline, the lender said.
The IMF urged GCC states to continue with and expand reforms, welcoming the imposition of value-added tax by Saudi Arabia and the UAE.
It also called on GCC countries to impose corporate and personal income tax in order to diversify their revenue streams.


Singapore Airlines denies snooping with seatback cameras

Updated 4 min 23 sec ago
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Singapore Airlines denies snooping with seatback cameras

  • Outcry online from worried passengers who spotted the tiny lenses peering at them
  • The airline confirmed that some of its latest inflight entertainment systems did have fixed cameras — but assured passengers that they had been disabled

SINGAPORE: Singapore Airlines insisted Thursday that cameras on its planes’ entertainment systems had been disabled after an outcry online from worried passengers who spotted the tiny lenses peering at them.
Travelers took to Twitter and other social media to raise the alarm over the cameras at the bottom of seatback screens on a number of the Singapore flag carrier’s newer aircraft.
“Just found this interesting sensor looking at me from the seat back on board of Singapore Airlines. Any expert opinion of whether is a camera?” passenger Vitaly Kamluk tweeted.
His tweet was accompanied by photos of the monitor with the embedded camera.
Another passenger urged the airline in a tweet to “notify all your passengers and get their consent, particularly EU residents, that you are doing this, why, what are you doing with the data and how long you keep it.”
The airline confirmed that some of its latest inflight entertainment systems did have fixed cameras — but assured passengers that they had been disabled.
“These cameras have been intended by the manufacturers for future developments. These cameras have been permanently disabled on our aircraft and cannot be activated on board,” the airline said in a statement.
“We have no plans to enable or develop any features using the cameras.”