Dubai: Egypt is expected to have the strongest economic growth in the Arab world in 2019, economists said on Wednesday, with World Bank forecasts pointing to a rate of between 5 and 6 per cent.
Mahmoud Mohieldin, senior vice president of the World Bank Group, said Egypt’s economic growth rate will be more than twice that of the Arab world, which will be at around 2 per cent. The Gulf region, specifically, is expected to see an average growth rate of 3 per cent.
But even at such an economic growth rate, there are still plenty of challenges.
“We’re at a time of uncertainty. The secretary general of the United Nations said there is a crisis of trust. This is the general picture,” Mohieldin said.
Speaking in Dubai at the Arab Strategy Forum, he said oil prices will impact these figures of economic growth rates in the region.
“Despite all the talk about diversification and about new industries over the past few years, the Arab world [economies] still grow with the rise of oil prices and slow down when oil prices drop — with a few exceptions. That’s why we think the expected growth rates in the Arab world are related to changes in oil prices,” he said.
Also speaking on the same panel was Nasser Saidi, Lebanon’s former minister of economy and trade, who said that a 3 per cent growth rate in 2019 in the GCC is “optimistic.” He said he expected economic growth in the Gulf region to average 2 per cent.
In early October, the Institute of International Finance said it expects overall growth in the GCC of 2.7 per cent in 2019, picking up from 2.3 per cent in 2018 and stagnation in 2017.
Oil prices, which are still a major factor in Gulf economies, have dropped by more than $20 *Dh73.5) a barrel since that report, though, with Brent crude prices falling nearly 29 per cent from a price of $86 in early October to its current level of $61.
On Wednesday, Saidi also shared a more bearish outlook of the global economy, saying that he expected to see a recession some time next year.
“If we look at global economies, there’s a consensus that between 2016 and 2020, there’s a slowdown in growth that may reach a recession. I’m of the side that believes that a recession is likely to start in 2019,” he said.
Saidi said such a recession will be triggered by factors that include the status of the oil market, a possible global financial crisis similar to the 2008 crisis, and a trade war between the US and China.
The former minister, who is also the founder and president of Nasser Saidi and Associates and former chief economist at DIFC Authority, said the US economy has reached the top of its business cycle, and that trade disputes between the US and China may well slow global economic growth in 2019.