The International Monetary Fund (IMF) has said that the real GDP of the oil exporting countries in the Middle East will moderate next year because oil prices are expected to soften.
Previous GDP growth for the GCC, which was estimated at about 7.2 per cent, has been lowered to 4 per cent, on fears that the global economy is teetering toward another recession as well as a possible decline in oil prices. Such high prices were primarily the reason for their previous economic boom.
Experts state that there are chronic problems in the region which need to be addressed by local governments. Chief among these challenges is the increasing number of unemployed citizens and the ever-exploding demographic population. These problems will further be aggravated by decreased economic growth, decline in tourism activities, as well as a decline in foreign remittances.
The IMF, hence lowered its forecast for the MENA region to 4 per cent as it expects the region to experience shrinking budgets, as governments’ will continue public spending on social projects and food subsidies.
Nonetheless, Dr. Sherrif Dallor, an economist, said that the IMF based its forecast on the assumption that oil prices as well as the dollar exchange rate will fall. However, there have been indications that oil prices and the dollar exchange rate will rise as America’s economy recovers. (Source: www.yallafinance.com)
