Introducing reforms aimed at creating jobs and improving competitiveness are essential to ensure economic growth in the Middle East and North Africa (Mena) region, says the Washington-headquartered IMF.

Large public deficits will continue to “weigh on economic prospects” in the region, as will low competitiveness and high unemployment levels, the fund says in its latest World Economic Outlook released on 8 April.

It urges that the region speeds up efforts to diversify industrial output to “improve competitiveness and resilience” and create new jobs.

The IMF forecasts that economic growth in the region, which includes Afghanistan and Pakistan, will grow between 2014 and 2015, despite “tepid” growth levels in 2013 as a result of declines in oil production and weak private investment.

For oil-exporting countries in the region, the IMF forecasts that overall GDP growth will rise by 3.5 per cent in 2014. This is an increase on the 2 per cent growth recorded in 2013. Low global oil demand, coupled with increased oil supply from the US and regional disruptions in oil supply, all contributed to dampening growth last year.

The IMF predicts that increases infrastructure investment will help fuel non-oil-related industries in the coming years, highlighting Dubai’s successful bid last year to host the World Expo 2020 event and Qatar’s plan to host football’s Fifa World Cup in 2022 as catalysts driving non-oil growth.

The IMF predicts that recovery in oil-importing countries in the region will continue to be “sluggish”, due to continued political uncertainty and social unrest.

Economic growth has consistently stood at 3 per cent since 2011, which the fund says is half the rate needed to reduce the region’s high unemployment levels and improve living standards.

The fund forecasts growth will stay at 3 per cent in 2014 and rise to 4 per cent in 2015. Exports will rise as a result of recovery in key trading partners, such as Europe.

Uncertainty surrounding the leadership of Egypt continues to weigh on the North African country’s prospects, with the IMF predicting 2.3 per cent growth in 2014. The Syrian conflict continues to dampen growth in Lebanon, intensifying sectarian violence and reducing investor confidence resulting in flat growth forecasts.

Confidence in Tunisia’s growth is expected to strengthen due to the introduction of a new constitution and pre-election reforms, the fund says.