Dubai: In the oil-importing countries across the Middle East and North Africa, economic growth is expected to strengthen this year as oil exporters, especially the GCC countries are projected to face short fall in oil incomes and overall GDP growth, the International Monetary Fund (IMF) said on Tuesday.
Middle East oil importers are projected to improve their average GDP growth from 3 per cent in 2014 to 4 per cent in 2015, supported by a gradual recovery in the euro area, improved domestic confidence, and more accommodative fiscal and monetary policies.
Lower oil prices are helping, though their impact on near-term growth has been moderated in many countries by incomplete pass-through to retail fuel prices.
“The benefits of lower oil prices are visible in improved fiscal/quasi-fiscal positions and reduced external vulnerabilities rather than stronger growth,” said Masood Ahmad, Director of the IMF’s Middle East and Central Asia Department.
The IMF said although GDP is seen rising, economic growth rates remain too low to make a dent into high unemployment.
Ahmad said economic policy reforms are gaining traction in Egypt and the government efforts to cut the budget deficit and spur economic growth are yielding results while more is needed in terms of external funding and foreign investments to stabilise the economy. However Ahmad said the current government has not sought IMF loan.
Meanwhile the IMF official said Iraq has requested financial assistance from the IMF and agreement on a $800 million loan may be reached soon.