MENA economies to grow by 3 per cent in 2013, IMF says
Author: Nehal El-Sherif
Cairo (dpa) - Economic growth in the Middle East and North Africa (MENA) is expected to slow down to 3 per cent in 2013 due to an expected slowdown among oil exporters, who led the region's growth last year, the International Monetary Fund said Tuesday.
In 2012, the region's economic growth was relatively robust at 4.8 per cent, thanks mostly to the restoration of Libya's oil production and expansions in the Gulf states.
Iraq is expected to lead the 2013 growth rate in the MENA area thanks to a projected gross domestic product growth rate of 9 per cent, followed by Qatar with 5.2 per cent.
However, stable oil production among oil-exporters against a backdrop of relatively weak global demand is expected to reduce this year's overall rate.
Growth rate in the MENA area is estimated to increase to 3.7 per cent in 2014.
The region's slow political transitions and the risk that the Syrian conflict could spread to neighbouring states are both preventing a quicker recovery.
Oil importers will also continue to face significant fiscal challenges due to high energy subsidy spending.
In recent months, some countries undertook macroeconomic adjustments, in the form of greater exchange rate flexibility and reduced energy subsidies, including Egypt and Tunisia, the IMF report said.
Both countries - the first to topple their presidents in the 2011 uprisings that then spread across the region - have faced similar problems, such as high unemployment, over the past two years.
With Egypt and Tunisia both seeking loans from the IMF, their governments have cut subsidies and raised taxes to improve their fiscal situation.
According to reports, the IMF and Tunis have already reached an agreement on a 1.78-billion-dollar precautionary loan, while Cairo is still holding talks on a loan worth 4.8 billion dollars.
"The region must not lose sight of the medium-term challenge of diversifying their economies, creating more jobs, and generating more inclusive growth," the IMF said.
Syria was excluded from this year's projections because of the ongoing conflict there.
