IMF expects GCC economic growth to hit record low in 2017

The International Monetary Fund (IMF) said on Tuesday it expects economic growth in the Gulf region to ease to its lowest level at 0.5 percent this year, citing OPEC production cuts.

Non-oil growth is forecast to recover to 2.6 percent and 2.4 percent in 2017 and 2018, respectively, amid a slowdown in financial regulation.

“Oil exporters should continue pursuing deficit reduction plans to maintain fiscal sustainability and, where relevant, to support exchange rate pegs,” the fund said in its Regional Economic Outlook for the Middle East and North Africa (MENA) region.

As progress is uneven across countries, some will need to identify additional fiscal consolidation measures, while protecting social and growth-oriented expenditures.

It will be much better for all countries to achieve more progress on improving institutions and public finances, the fund said.

Growth risks are clear in oil producing countries in the MENA region, Afghanistan, and Pakistan amid uncertainty over oil prices, the IMF added.