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MENA Economic Growth Hit By Social Unrest
The social and political turmoil rattling the Middle East and North Africa is affecting the region’s economic growth amid growing uncertainty, says the International Monetary Fund.Preserving macroeconomic stability while building social cohesion is a priority for MENA countries, says the IMF in its latest report ”World Economic Outlook”.
Elevated oil prices have boosted the fortunes of the region’s oil exporters, while creating challenges for oil importers, adds the report.
The IMF scaled back its 2011 growth forecast for the Middle East and North Africa to 4 pc from 4.2 pc in June. The Fund’s growth forecast for 2012 was also lowered to 3.6 pc from the previous 4.4 pc expectations.
Growth in oil-exporting economies is forecast to reach 5 pc in 2011 and about 4 pc the following year with growth led by Qatar (driven by expanding natural gas exports), Iraq, and Saudi Arabia.
However, the Fund forecast growth for oil importers at 1.4 pc, saying that these countries are rocked by unprecedented social unrest and conflicts, which are weighing heavily on tourism receipts, capital flows, and investment.
Adding to the region’s troubles, the IMF says the European debt crisis and weaker growth prospects in the United States could further depress activity and slow foreign financing flows.
“Any intensification of the political crises would exacerbate the economic plight of the region,” the IMF warns, stressing that the MENA oil production could be further affected with “ramifications for global energy markets.”
The global economy is in a “dangerous new phase”, says the IMF, noting that “the global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing”.