The Washington-based International Monetary Fund (IMF) has revised down its forecast for the Middle East and North Africa’s GDP growth for the coming two years.

The fund’s latest World Economic Outlook (WEO) report has forecasted GDP growth rates for the Middle East and North Africa (Mena) of 2.3 per cent in 2017 and 3.2 per cent in 2018, down from 3.8 in 2016.The figures for the Mena region’s GDP growth for 2017 and 2018 are down 0.5 and 0.1 per cent respectively, compared with the the IMF’s previous projections in January this year. 

IMF forecasts that the collective real GDP growth for oil exporting countries in the area covering mena, Afghanistan and Pakistan will fall by approximately 52 per cent to 1.9 per cent in 2017, down from 4 per cent in 2016. The IMF sees the picture improving for the region’s oil exporters in 2018, forecasting that real GDP growth will increase by 2.9 per cent.

“Emerging market and developing economies have accounted for the bulk of the downward revisions to global growth in recent years and have been a source of uncertainty around the WEO forecasts,” said the report, which also pointed at political uncertainty, domestic conflicts and the fall of oil prices for the region’s subdued recovery in the coming years.

Saudi Arabia’s real GDP growth is expected to slow from 1.4 per cent in 2016 to 0.4 per cent in 2017 and 1.3 per cent in 2018. The IMF’s forecast for the kingdom remains unchanged from the IMF’s report released in Janurary this year, but its 2018 GDP growth forecast is down by 1 per cent compared with the fund’s projections earlier this year.

The report also states that the kingdom’s commitment to oil production cuts since January, and recent indications that it could cut production beyond its initial commitment, could enhance the credibility of the OPEC production-cut deal that was agreed in late 2016.

“In response to these agreements, spot oil prices increased to more than $50 a barrel. Oil prices beyond that level will stimulate investment, which is expected to increase in 2017 after two consecutive years of significant decline,” according to the report.

The report has also projected oil prices to rise to an average of $55 a barrel in 2017/18, compared with an average of $43 a barrel in 2016. “Oil prices increased by some 20 percent between August 2016 and February 2017, in part due to the agreement by OPEC and other producers to cut oil production.”