São Paulo – A report on the Middle East, North Africa and Central Asia that was disclosed on Wednesday (26) by the International Monetary Fund (IMF) shows two realities for the countries of the region. While exporters of oil will see their revenues and Gross Domestic Product (GDP) grow, importers will have lower growth.
According to the study, the countries of the Menap (Middle East, North Africa, Afghanistan and Pakistan) grew 4.4% in 2010, should grow 3.9% in 2011 and 3.7% in 2012. The nations of the Caucasus and Central Asia (CCA), in turn, according to the study, grew 7% in 2010 and should grow another 5.6% in 2011 and 6.2% in 2012. This group includes Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.
One of the reasons causing the IMF to forecast a reduction in the growth of some countries in Africa and the Middle East is the reduction in the price of the barrel of oil. The IMF estimates that the barrel should be traded at US$ 103.20 in 2011 and US$ 100 in 2012. In 2010, the average price of the barrel of oil was US$ 79.03.
“Fiscal vulnerability has increased substantially relative to 2008, as break-even oil prices — the prices at which the fiscal balance is zero given the level of expenditure and non-oil revenues —have risen steadily and are now approaching observed oil price,” says the report, adding that higher sovereign risk could increase the cost of loans to some exporters of the Menap.
The IMF divides the countries of the region in exporters and importers of oil. Among the exporters are Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates and Yemen. Among those that import oil are Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Syria and Tunisia.
Thanks to the 31% growth in oil prices this year, the countries of the Gulf Cooperation Council (GCC) should grow 7%. Furthermore, Saudi Arabia, the Emirates and Kuwait exported more in 2011. These nations expanded their production and sale of oil to compensate the reduction of Libyan output. Qatar also increased its production of natural gas. Oil should generate US$ 334 billion to the export countries (except Libya). Of this total, US$ 279 billion will go to the members of the GCC (Saudi, Bahrain, Qatar, the Emirates, Kuwait and Oman).
The results for hydrocarbon exporters in 2011 should not be repeated in 2012. IMF forecasts are that Qatar, for example, should grow 18.7% in 2011 and 6% in 2012. Saudi should grow 6.5% in 2011, but no more than 3.6% in 2012. Sudan will have a 0.2% reduction in GDP in 2011 and 0.4% in 2012.
The IMF recommends that oil exporters be cautious in management of their revenues. “Accommodative fiscal and monetary policies remain appropriate in most countries in light of the still-fragile recovery, the modest rebound in credit growth, and the lack of signs of overheating. Over the longer horizon, fiscal and monetary policy should be redesigned to enhance the ability to smooth consumption and absorb shocks,” warns the IMF.
Oil importers have less optimistic forecasts. While the exporters should register average GDP growth of 4.9% this year, importers will most probably grow no more than 2%. “Since the beginning of this year, a deterioration in the international economic outlook and the buildup of domestic social pressures have resulted in an economic slowdown in many of the region’s oil-importing countries. But we should not lose sight that the ongoing historical transformation holds the promise of improved living standards and a more prosperous future for the people in the region,” said Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, referring to the Arab Spring.
“The political and economic transformations occurring in several of [the oil importers] are advancing slowly and are expected to extend well into 2012. Together with a worsening economic outlook in Europe and globally, the region is seeing a sharp drop in investment and tourism activity. As a result, the recovery in 2012 is expected to be weaker than anticipated, with growth projected at just over 3 percent [as against 4.75% in 2010 and less than 2% in 2011]”, according to the IMF report.
*Translated by Mark Ament
