Dubai: Middle Eastern and North African economies will benefit from increased optimism on economic growth worldwide this year, the International Monetary Fund said Thursday.
Projecting a slightly higher growth in global gross domestic product (GDP) for the world in 2010, the IMF said the positive impact will be felt in the Mena region next year.
One of the few regions that hasn't experienced negative growth over the past two years, Mena economies will grow by 4.50 per cent this year compared to 2.40 per cent in 2009, the IMF said. It has, however, revised upward its forecast for GDP growth in 2011 to 4.90 per cent.
The region will grow at a quicker rate than the world average as well as the average of developed nations, but is expected to lag behind the growth rate of emerging economies.
"Our forecast for world growth in 2010 is about 4.50 per cent, a bit higher than our April forecast of around 4.25 per cent. This revision largely reflects the stronger activity during the first half of the year," said IMF chief economist Olivier Blanchard. "Our forecast for 2011 is broadly unchanged, at about 4.25 per cent."
However, the global growth rate hides a large difference between and within advanced and emerging and developing economies, Blanchard pointed out.
"Our growth forecast for advanced countries is 2.60 per cent for 2010 and 2.40 per cent for 2011. These low growth rates imply that high unemployment will remain a central issue.
"Our growth forecast for emerging and developing economies is 6.80 per cent in 2010 and 6.40 per cent in 2011, an upward revision of 0.50 per cent for 2010 and a downward revision of 0.10 per cent for 2011," Blanchard said.
Economic numbers globally for the first half of this year were stronger than the IMF predicted in April.
"These would give reasons to be more optimistic than we were earlier," Blanchard said. "Looking forward, however, strong clouds have appeared on the horizon. They present real dangers and serious policy challenges, and give reasons to be less optimistic than we were earlier."
Although Asia is well placed to provide the momentum for a robust global recovery, global financial stability has experienced a setback, the IMF said.
"Sovereign credit risks in parts of the euro area have materialised and have spread to the financial sector there, threatening to spill over to other regions and reestablish the adverse feedback loop with the economy," said Jose Vinals, the IMF's financial counsellor and director of the monetary and capital markets department.