Dubai: Riding on high oil prices and output, the Middle East and North Africa (MENA) region will see an accelerated economic growth of 5.1 percent in 2012 as compared to 3.3 percent in the previous year, the International Monetary Fund (IMF) said Sunday.
Owing to higher oil prices and production, the region’s oil-exporting countries — Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, the United Arab Emirates, and Yemen — are expected to expand by 6.6 percent in 2012 before moderating in 2013, the IMF said.
But faced with a difficult external environment, growth in the roughly defined MENA region’s oil importers – Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Sudan, and Tunisia – will be just above two percent in 2012.
“In the Arab countries in transition, continued domestic disruptions are also holding back growth,” the IMF said in its regional economic outlook for the Middle East and Central Asia.
“The biggest challenge facing governments in the Arab countries in transition is how to manage the rising expectations of populations,” Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, said in a statement.
He added that people “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”.
Ahmed said the economic outlook for the Middle East and North Africa region was mixed.
Most of the region’s oil-exporting countries are growing at healthy rates, while the oil importers face subdued economic prospects.
The region’s oil-exporting countries are expected to post solid growth in 2012, largely on account of “Libya’s better-than-expected post-conflict recovery”.
In the countries of the Gulf Cooperation Council (GCC), growth remains robust, supported by expansionary fiscal policies and accommodative monetary conditions.
However, the GCC region growth is expected to slow down from 7.5 percent in 2011 to 3.75 percent in 2013 as oil production reaches a plateau.
Oil prices are expected to remain above $100 per barrel in 2012-13. As a result, the oil exporters’ combined current account surplus is likely to remain near a record high of about $400 billion in 2012.
“This has helped governments to respond to growing social demands by increasing expenditure on wages and salaries, which rose dramatically in most oil exporters in recent years,” Ahmed said.
“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.
“Fiscal policy could gradually shift to bolstering national savings, and countries could ease the pace of government spending, especially on expenditures that are hard to reverse – like public sector hiring,” he said.