São Paulo – The economy of the Middle East and North Africa (Mena) should grow by 4.2% in 2012 and 3.7% in 2013, according to the World Economic Outlook (WEO) report issued this Tuesday (17th) by the International Monetary Fund (IMF). This report is a revision of the January version and also forecasts an improvement in global economic indicators. The combined GDP of the Mena countries will grow more than previously estimated in 2012. The previous estimate was of a 3.6% increase. For 2013, the forecasted rate was 3.9%. It has been revised downward to 3.7%.
The Fund’s report forecasts financial difficulties for oil importing countries. According to the IMF, they will be harmed by a hike in oil prices, as well as by low capital flows and dropping tourist revenues caused by political instability in the region. In turn, oil exporting countries should increase production as a result of declining sales from Iran. These countries include Iraq, Saudi Arabia and Libya.
There is, however, the chance of a spillover in both importers and exporters of oil, according to the IMF, in the case of an eventual worsening of the economic crisis in Europe. Still, the Fund forecasts that in addition to an increase in GDP, the countries in the region should benefit from a decline in inflation, down from 9.5% in 2011 to 8.75% in 2013. Figures for Syria and Libya were not included in the report.
According to the Fund, the Mena region will not be the only one to show improvement in economic activity. The Fund’s revised world economy growth forecast is 3.5%. The previous forecast, issued in January, was 3.3%. In 2013, the Fund estimates a 4.1% increase in the global GDP, 0.1% more than previously expected.
In the assessment issued alongside the forecasts, the IMF’s Olivier Blanchard, claims that although developed and emerging economies are doing better now than in 2011, there is still a risk that the financial crisis will harm their recovery. The world’s third and fourth leading economies in the European Union, Italy and Spain, respectively, are in a recession and will see a decline in GDP in 2012. Still, the recovery of the United States economy, the strengthening of other economies, the provision of liquidity made by the European Central Bank and the changes in government in Spain and Italy are aiding the recovery.
“With the passing of the crisis, and some good news about the US economy, some optimism has returned.” It should remain tempered. Even absent another European crisis, most advanced economies still face major brakes on growth. And the risk of another crisis is still very much present and could well affect both advanced and emerging economies,” said Blanchard in the statement issued by the IMF.
The growth forecast for Latin America and the Caribbean this year is 3.7%, and 4.1% for 2013. The previous estimates were 3.5% and 4%. According to the IMF, the region’s economy performed well in 2011 thanks to high commodity prices. Still, it is not free from a European crisis spillover. For Brazil, the growth forecast is 3% this year and 4.1% in 2013.
*Translated by Gabriel Pomerancblum
