Dubai: The Arab Economic Outlook Report from the Arab Monetary Fund (AMF) showed that the economic activities in the Arab region have improved in 2018 because of the increase in the global demand, the rise in the international oil prices, as well as the positive effects of economic reforms being implemented in a number of these countries.
The growth rate of the Arab countries as a group has been revised upward to 2.3 per cent in 2018, while the growth rate for 2019 is kept unchanged at around 3 per cent.
The AMF has revised the growth rate of the GCC upward in 2018. “This group of countries will benefit from the increase in oil production in the second half of the year. Also, the rising trend of international oil prices will support the public finance, strengthen the fiscal space which will support the implementation of economic diversification plans,” the report said.
While the AMF expects reforms in the GCC countries to improve the business climate resulting in higher economic growth of an estimated 2.5 per cent next year, the growth expectations in other Arab oil-exporting countries have been lowered to 1.8 per cent in 2018 reflecting the internal conditions in some of these countries which led to a notable decline in oil production in 2018 against 2017 levels.
Growth expectations for the Arab oil-importing countries remain unchanged at 3.9 per cent in 2018 and 4.2 per cent in 2019 supported by strong external and internal demand as well as the positive impacts of some of the recent economic reforms.
The Arab Economic Outlook report noted that the general price level has risen in the first half of 2018 due to price increases of different groups including food and beverages, transportation, housing, electricity, water, gas, health, education, restaurants and hotels in some Arab countries.
Inflation in the GCC countries is expected to reach 3 per cent in 2018 and to decrease to 1 per cent in 2019, while inflation rate of the other Arab oil-exporting countries is anticipated to reach a higher level to be around 8.1 per cent in 2018 and to lessen to 6.2 per cent in 2019.