The International Monetary Fund (IMF) has revised its economic growth forecast for the Middle East and North Africa (MENA) to 2.1% for this year, a decline of 0.6 percentage points from its April estimate. This adjustment is attributed to ongoing conflicts and extended OPEC+ oil production cuts.
The IMF points out that economic uncertainty in the MENA region is high, with key risks including escalating conflicts, geo-economic fragmentation, and commodity price volatility. However, the region’s economic growth is expected to rebound to 4% next year, contingent upon OPEC+ reversing its oil production cuts and easing regional conflicts.
For oil-exporting countries in MENA, growth is anticipated to strengthen to 2.3% this year, up from 1.7% in 2023, and further to 4% next year. Yet, the IMF has downgraded its near-term forecasts for 2024 and 2025 by 0.6 and 0.4 percentage points, respectively, mainly due to prolonged oil production cuts in several Gulf Cooperation Council (GCC) nations, Algeria, and Iraq.
Additionally, growth is expected to moderate to 3% in the medium term as the non-oil sector gradually picks up momentum. While OPEC+ plans to begin reversing oil production cuts in December, concerns about weaker demand and lower prices raise doubts about the feasibility of this plan.
Story via OilPrice.com