São Paulo – The International Monetary Fund (IMF) continues pointing out diverging economic outlooks for the Middle East and North Africa countries, according to a report released last Sunday (11th). The Fund divides the region into two groups: oil-exporting and oil-importing countries.
Economic growth prospects are good for the former group and bad for the latter. For the region as a whole, the IMF forecasts 5.3% growth this year and 3.6% in the next one. Oil-exporting countries are expected to grow by 6.6% in 2012 and 3.8% in 2013; oil importing countries are expected to grow by 1.2% in 2012 sand 3.3% in 2013.
The growth estimates for oil-rich nations were strongly influenced by the Libyan recovery, which was better than expected according to the Fund. The Gulf countries are also showing “robust growth,” especially due to “expansionistic fiscal policies” and accommodative monetary conditions.” The IMF is expecting oil barrel prices to remain above US$ 100 this year and in the next.
Regarding the Gulf Cooperation Council (GCC), the Fund is expecting growth to slow down from 7.5% in 2011 3.75% in 2013 due to the stabilization of oil production. The oil exporting countries are Algeria, Iraq, Libya, Yemen, Iran (non-Arab), Saudi Arabia, Bahrain, Qatar, Kuwait, United Arab Emirates and Oman, the latter six of which comprise the GCC.
“The main issue facing Middle East oil exporters is how to take advantage of their current positive position to strengthen their resilience against oil price declines and diversify their economies to boost private-sector job creation,” said the director of the IMF’s Middle East and Central Asia Department, Masood Ahmed.
On the other hand, the oil importing countries (Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morcco, Sudan and Tunisia) remain under internal and external pressure. On the one hand is high food and fuel prices combined with the crisis in Europe, which is a major partner to these countries; on the other hand is the yet-turbulent political transition in Arab Spring nations.
The IMF labels Egypt, Libya, Tunisia, Yemen, Morocco and Jordan “Arab countries in transition,” even though only the former four have undergone actual changes in regime during the Arab Spring. Excluding Libya, where oil production has returned to levels similar to those that preceded the conflict which overthrew Muammar Gaddafi, the growth forecast for the group is 2% this year and 3.6% in the next.
“The biggest challenge facing governments in the Arab countries in transition is how to manage the rising expectations of populations that are becoming increasingly impatient to see a transition dividend at a time when there are threats to near-term macroeconomic stability and the margin for policy manoeuvre is limited,” said Ahmed.
According to the Fund, these countries must create jobs urgently and provide “tangible benefits” to the population. For such, the governments must devise policies to restore macroeconomic stability and implement structural reforms to make their economies more competitive. The IMF director added that these nations need international backing to obtain financing, technical assistance and access to markets.
*Translated by Gabriel Pomerancblum
