The agency in its semiannual World Economic Outlook
estimated the region's growth to be 4.1 percent this year and 5.1 percent in
2011, compared to just 2 percent in 2009.
“The strength of the recent economic recovery in the MENA
region is largely underpinned by the rebound in oil prices from their trough in
2009,” the IMF said.
Mideast oil exporters, such as Saudi Arabia, were largely
able to weather the worst of the global meltdown by tapping oil revenues to
spend on infrastructure development and social services. Other countries, such
as Egypt and Lebanon, withstood the decline largely because their banking and
financial sectors were not as exposed as those in the West to the crisis.
The rebound in oil prices played a key role in boosting the
region's economies. Oil futures are currently near $83 per barrel, well above
the $75 per barrel level that Saudi Arabia and others had indicated was fair
for both consumers and producers.
But oil, on which many of these economies rely for as much
as 95 percent of their foreign revenues, is a double-edged sword.
“The economic outlook in the region is closely linked to
global developments, primarily through the impact of global economic activity
on oil prices,” the IMF said. It noted that increased demand from developing
nations, especially in Asia, was likely to be offset by lower consumption in
the West.
In individual cases, internal politics could also play a
factor.
The IMF put OPEC member Iraq's growth at 2.6 percent for
2010, far lower than the 7.3 percent it projected in April.
The revision could be a reflection of how that country's
inability to form a government seven months after elections, along with
lingering security concerns following the withdrawal of US combat forces, has
undercut its appeal to international investors.
Economic growth, however, is forecast at 11.5 percent in
2011 in Iraq, amid expectations of a rise in oil production.
The IMF also warned about sluggish credit growth in the
region.
In particular, highly publicized financial woes in rich Gulf
states such as Dubai, Kuwait and Saudi Arabia have raised concerns. State
conglomerate Dubai World's inability to make good on the terms of its debt
payments late last year spooked regional lenders, making credit far harder to
get.
Dubai World has since won over the bulk of its creditors to
its $24.9 billion restructuring plan, but bankers remain far more reluctant to
provide financing than they did before the financial slump — in part because of
concerns about their own balance sheets.
An immediate challenge for authorities, according to the
IMF, is to “revive the financial intermediation process.” In other words, they
need to convince banks to start lending again to get business moving.
