IMF Spring 2018 Regional Economic Outlook Calls for Accelerated Reforms to Promote Faster and More Inclusive Growth in the Middle East, North Africa, Afghanistan and Pakistan RegionPress Release 02 May 2018 06:29 am
- Global growth is projected to strengthen further to 3.9 percent in 2018 and in 2019
- Economic growth in MENAP oil exporting countries is expected to accelerate in 2018-2019 thanks to continued recovery in non-oil activity
- Fragile recovery continues in MENAP oil importing countries supported by gains from ongoing reforms and improved confidence
- Outlook for oil prices remains uncertain, expected to remain subdued in the medium term
Dubai-UAE: 02 May 2018 - Dubai International Financial Centre (DIFC), the leading financial hub in the Middle East, Africa, and South Asia region (MEASA), hosted today the launch of the Spring 2018 Regional Economic Outlook (REO) report for the Middle East, North Africa, Afghanistan and Pakistan (MENAP), in collaboration with the International Monetary Fund (IMF).
According to the report, the global economy continues to strengthen. Global growth is projected to accelerate further to 3.9 percent in 2018 and in 2019 from estimated 3.8 percent in 2017, the highest level since 2011. Risks to the global outlook are broadly balanced in the near term, but are skewed to the downside over the medium term. This is mainly driven by the risk of tighter financial conditions, as well as the potential for a shift towards inward-looking policies, which would harm international trade and dampen commodity prices.
For the MENAP region, stronger prospects in the euro area and a marginal strengthening of the outlook for China, a key partner for the region, are expected to translate in positive momentum over the coming years. However, higher global interest rates, as monetary policy continues to normalise in advanced economies, could tighten credit and liquidity conditions in the region and expose its fiscal vulnerabilities.
The outlook for oil prices remains highly uncertain, according to the report, largely reflecting supply-side uncertainty. Prices are expected to remain subdued in the medium term.
For MENAP oil exporting countries, economic growth is expected to accelerate in 2018-2019 after bottoming out in 2017. This largely reflects the continued recovery in non-oil activity as many countries are slowing fiscal consolidation to support domestic demand.
Growth recovery among MENAP oil importing countries is set to continue in 2018, supported by gains from ongoing reforms, improved domestic confidence in some countries, and stronger external demand.
Commenting on the report’s findings, Arif Amiri, Chief Executive Officer of DIFC Authority said, “The need to accelerate structural and fiscal reforms continues to be the overriding theme of the region’s economic outlook. This is particularly important in the context of achieving higher and more inclusive growth in the region, and creating more job opportunities for its rapidly growing population. As MEASA’s leading financial centre, DIFC is fully committed to promoting financial inclusion and innovation in the region, and unlocking the untapped potential of the youth is a key component of this commitment.”
He added: “The IMF’s Regional Economic Outlook reports continue to be a source of significant insight into emerging economic trends. The strategic partnership we have with IMF complements our ongoing efforts to anticipate the future of finance, and in turn lay the foundations for long-term growth in the MEASA region that we serve.”
Jihad Azour, Director of the IMF’s Middle East and Central Asia Department said, “The region can and should benefit more from the improved global outlook. Doing this requires reforms that boost growth and job creation. Priorities include improving the business environment, reforming labor markets, reducing the dependence on oil and other commodities, fighting corruption, and ensuring that opportunities are shared by all, particularly young and women. Macroeconomic stability will remain critical for sustainable and inclusive growth. For many countries in the region this means continued efforts to strengthen government finances.”
The semi-annual Report details trends and developments across countries of the Middle East, North Africa, Afghanistan, Pakistan (MENAP) and the Caucasus and Central Asia (CCA). The Report’s sectoral indicators are widely used as a benchmark for future economic projections and set the tone for growth, trade and investment.
The need to accelerate structural and fiscal reforms continues to be the overriding theme of the region’s economic outlook. This is particularly important in the context of achieving higher and more inclusive growth in the region, and creating more job opportunities for its rapidly growing population."
Arif Amiri, Chief Executive Officer of DIFC Authority