Mideast set to see growth of 3.4%

Updated 19 July 2016
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Mideast set to see growth of 3.4%

DUBAI: The International Monetary Fund on Tuesday raised its 2016 growth forecast for the Middle East and North Africa after a rebound in oil prices, but maintained its cautious outlook for Saudi Arabia.
The region, along with Afghanistan and Pakistan, is set to see economic growth of 3.4 percent this year, better than a previous projection of 3.1 percent, the IMF said.
At the same time it cut the growth forecast for 2017 to 3.3 percent, down from 3.5 percent in April, citing fallouts from "terrorism" and geopolitical tensions in its World Economic Outlook Update.
The region includes major oil exporters like the Gulf Arab states, Iraq, Iran and Algeria, as well as oil importers such as Egypt, Morocco and others.
Following the lifting of international sanctions in January, Iran's oil exports have reached more than two million barrels per day, close to their pre-sanction levels.
"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. "Geopolitical tensions, domestic armed strife, and terrorism are also taking a heavy toll on the outlook in several economies, especially in the Middle East, with further cross-border ramifications," it said.
The IMF maintained its growth projections for Saudi Arabia, the world's top crude oil exporter, at 1.2 percent for this year and raised it slightly to 2.0 percent for 2017.
The economies of the Kingdom and its oil-exporting peers in the Gulf Cooperation Council (GCC) states have been hit hard by the slide in oil prices which began more than two years ago. They have lost hundreds of billions of dollars in revenues, prompting them to take austerity measures and resort to borrowing to plug the huge budget deficits.
The IMF has praised the reform measures while insisting that more needs to be done.
In a report last month, the IMF said the value of oil and natural gas exports in the GCC states and Algeria was projected to fall by almost $450 billion this year compared with 2014.


‘Huge increase’ in crude prices not expected: IEA executive director

Updated 19 July 2019
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‘Huge increase’ in crude prices not expected: IEA executive director

  • The International Energy Agency is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day
  • IEA’s Fatih Birol: Serious political tensions could impact market dynamics

NEW DELHI: The International Energy Agency (IEA) doesn’t expect oil prices to rise significantly because demand is slowing and there is a glut in global crude markets, its executive director said on Friday.
“Prices are determined by the markets ... If we see the market today, we see that the demand is slowing down considerably,” said IEA’s Fatih Birol, in public comments made during a two-day energy conference in New Delhi.
The IEA is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Birol told Reuters in an interview on Thursday.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd. But in June this year it cut the growth forecast to 1.2 million bpd.
“Substantial amount of oil is coming from the United States, about 1.8 million barrels per day, plus oil from Iraq, Brazil and Libya,” Birol said.
Under normal circumstances, he said, he doesn’t expect a “huge increase” in crude oil prices. But Birol warned serious political tensions could yet impact market dynamics.
Crude oil prices rose nearly 2 percent on Friday after a US Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows.
Referring to India, Birol stressed the country could cut its imports, amid rising oil demand in the country, by increasing domestic local oil and gas production.
Prime Minister Narendra Modi had set a target in 2015 to cut India’s dependence on oil imports to two-thirds of consumption by 2022, and half by 2030. But rising demand and low domestic production have pushed imports to 84 percent of total needs in the last five years, government data shows.
Meanwhile, the IEA doesn’t expect a global push toward environmentally friendly electric vehicles can dent crude demand significantly, Birol said, as the main driver of crude demand globally has been petrochemicals, not cars.
He said the impact of a serious electric vehicle adoption push by the Indian government would not be felt immediately.