The International Monetary Fund forecast that economic growth in the Middle East and North Africa will accelerate to 4.2 percent this year from 3.5 percent in 2011.
The economies of oil importers will expand by 2.2 percent and crude exporters by 4.8 percent, the Washington-based IMF said in its World Economic Outlook report today. Egypt’s growth will slow to 1.5 percent, it said, predicting growth rates of 11 percent for Iraq, 6.6 percent for Kuwait and 6 percent for Saudi Arabia and Qatar.
“Among oil importers, strong oil prices, anemic tourism associated with social unrest in the region, and lower trade and remittance flows reflecting ongoing problems in Europe are major constraints,” the IMF said. “For oil exporters, risks revolve around the price of oil.”
Egypt’s Hosni Mubarak and three other regional leaders have been ousted since the start of last year by popular movements that were partly fueled by the world’s highest youth jobless rate. Saudi Arabia, the biggest economy in the Middle East, increased government spending by 23 percent as the kingdom’s rulers sought to create jobs and build houses in order to avert the kind of popular uprising that swept other Arab countries.
“The primary challenge is to secure economic and social stability, but there is also a short-term need to place public finances on a sustainable footing,” the IMF said. “For oil exporters, governments need to seize the opportunity presented by high oil prices to move toward sustainable and diversified economies.”
Economic growth in the region will slow to 3.7 percent in 2013, the IMF forecasts.
To contact the reporter on this story: Glen Carey in Riyadh at email@example.com
To contact the editor responsible for this story: Andrew J. Barden at firstname.lastname@example.org