São Paulo – Middle Eastern and North African countries’ economies will grow this year and in 2015, but they will have long-term challenges. According to the most recent data in the report “Regional Economic Outlook”, disclosed this Tuesday (6th) by the International Monetary Fund (IMF), the Gross Domestic Product (GDP) of the Arab nations, plus Iran, Afghanistan, and Pakistan, should grow 3.2% this year and 4.4% in 2015. Among the oil exporting countries, the forecast increase is 3.4% and 4.6%, respectively. The forecast for oil importing countries, however, is 2.8% this year and 4.1% in the next.
Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, United Arab Emirates and Yemen are among the countries the IMF considers oil exporters. Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Sudan, Syria and Tunisia are considered oil importers. From these groups, Afghanistan, Pakistan and Iran are not Arab countries.
In the Fund’s evaluation, the GDP of the Middle Eastern and North African countries will grow this year due to the global economy recovery. Both oil exporters and importers, however, will need to promote reforms in their economies to ensure long-term growth.
“Oil and gas output is expected to remain broadly stable in 2014. GCC production will rise owing to strengthening global demand, challenges in restoring oil production in the non-GCC countries (particularly Libya), and a decline in global oil inventories caused in part by cold weather in North America ”, says the release from the Fund.
The evaluation for oil importing countries, however, is that the economy grew roughly 3% last year, will expand a little below these 3% this year and increase to 4% in 2015, not enough for the demand of these countries. “Hovering at 3 percent last year, it has not yet caught up to the historical average, which is close to 5 percent. Even if it did, growth would be insufficient to reduce persistently high unemployment and improve living standards in the region ”, says the document.
Challenges
The document from the IMF warns that Middle East and North Africa countries will have long term challenges and claims that the oil exporters can no longer depend exclusively of the production of the commodity to survive. It reckons that the non-oil sector has been boosting the growth, but it warns that the recovery of the production in other countries, the higher energetic efficiency and the supplying of other forms of energy in North America may influence the production and the price of the commodity.
“Futures markets suggest the price of crude could decline by about $6 per barrel between 2013 and 2015 ”, says the document.
The IMF also observes that the capacity of oil exporters to resist crises is lower than in previous reports due to the increase in public sector salaries, oil price reduction and smaller fiscal surplus. Besides, some of these oil producing countries have been offering generous energetic subsidies, which boost consumption at the expense of exports.
As regards the oil importing nations, the main challenges are to solve political problems, undertake structural reforms to create jobs and export. The document observes that Jordan, Morocco, Egypt, Yemen and Tunisia are nation in political “transition”. For this group, the growth forecast is 2.8% in 2014 and 4.3% in 2015.
The growth forecast for each country in 2014 and 2015 is as follows: Algeria, 4.3% and 4.1%, respectively; Bahrain, 4.7% and 3.3%; Iraq, 5.9% and 6.7%; Kuwait, 2.6% and 3.0%; Libya, -7.8% and 29.8%; Oman, 3.4% and 3.4%; Qatar, 5.9% and 7.1%; Saudi Arabia, 4.1% and 4.2%, United Arab Emirates, 4.4% and 4.2%; Yemen, 5.1% and 4.4%; Djibouti, 6% and 6.5%; Egypt, 2.3% and 4.1%; Lebanon, 1% and 2.5%; Mauritania, 6.8% and 6.5%; Morocco, 3.9% and 4.9%; Sudan, 2.7% and 4.6%; Tunisia, 3% and 3.5%; West Bank and Gaza, 2.5% and 2.7%. The IMF did not make predictions for Syria due to political uncertainty.
*Translated by Rodrigo Mendonça
Comments