MENA economic growth to pick up in 2019-2021: World Bank

Growth in the Middle East and North Africa region is expected to pick up slightly in to 1.9 percent 2019, but prospects are uneven across countries, the World Bank said in its ‘Global Economic Prospects’ report.

“Accelerating activity in Saudi Arabia and Egypt is expected to be offset by a sharp contraction in Iran following the imposition of US sanctions,” the report added.

Increased oil production and fiscal easing are supporting the recovery in some oil exporters, while oil importers continue to benefit from policy reforms, the World Bank maintained.

It said regional growth is projected to rise to 2.7 percent in 2020-21, as domestic demand among both oil importers and exporters shows a broad-based pickup, supported by reforms and diversification policies.

Key downside risks include the possibility of intensified geopolitical tensions, renewed volatility in oil prices, rising global trade restrictions, an abrupt tightening of global financing conditions, and delays in reform implementation.

The World Bank said growth in the MENA region is estimated to have improved to 1.7 percent in 2018, supported by increased oil production and eased fiscal stance in the GCC.

“Growth among oil importers has been supported by policy reforms, contributing to greater capacity to innovate,” it noted.

The region continues to tackle long-term challenges, such as high youth unemployment and electricity access, through structural adjustment programs. Inflation has been volatile in Egypt and Iran, but remains generally stable in the region. High public debt is a significant headwind to growth for oil importers,” it further added.