IMF predicts fragile recovery in Mena economies

08 October 2014

Forecast regional growth weaker than earlier predictions

Predicted economic growth in the Middle East and North Africa (Mena) region is likely to be marginally slower this year and the next, compared with earlier forecasts, according to the latest report from the Washington-based IMF.

GDP growth for the region is predicted to be 2.6 per cent in 2014 and 3.8 per cent in 2015, according to the fund’s new World Economic Outlook, published in early October.  

These figures are 0.5 per cent and 1 per cent lower than IMF forecasts made in July.

Recovery in the Middle East and North Africa remains “fragile”, despite a modest pick-up in growth due in part to improving external demand, said the IMF.

The revised regional growth rates are in line with the slightly revised global growth rates, which Oliver Blanchard, economic counsellor and head of the IMF’s research department, has described as “mediocre”.

World economic output is predicted to rise by 3.3 per cent and 3.8 per cent in 2014 and 2015 respectively, which is between 0.1 and 0.2 per cent less than the July predictions.

Heightened geopolitical risks, which could affect fuel prices and trade, were highlighted as key problems facing the world economy.

The report also said current conditions were right for an increased global push in infrastructure spending.

It said low borrowing costs support spending plans and it recommended that debt-financing projects could help improve global infrastructure without placing pressure on national governments’ debt-to-GDP ratios.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications