The Washington-based IMF has lowered its 2020 economic growth forecast for the Middle East and Central Asia region largely due to a downward revision of its expectations for the Saudi economy this year.
Growth in the Middle East and Central Asia region is expected to be 2.8 per cent in 2020, which is 0.1 percentage points lower than the IMF forecast in October last year.
“The downgrade for 2020 mostly reflects a downward revision to Saudi Arabia’s projection on expected weaker oil output growth following the Opec+ decision in December to extend supply cuts,” the IMF said in its latest World Economic Outlook.
The IMF now expects Saudi growth to be 1.9 per cent in 2020, 0.3 percentage points lower than the forecast it made in October last year. The growth forecast for 2021 is unchanged at 2.2 per cent.
Economic growth for 2021 is expected to accelerate to 3.2 per cent.
The report adds that the prospects for several economies remain subdued owing to rising geopolitical tensions in Iran, social unrest in Iraq and Lebanon, and civil strife in Libya, Syria and Yemen.
Globally growth is projected to rise from an estimated 2.9 per cent in 2019 to 3.3 per cent in 2020 and 3.4 per cent for 2021. This is a downward revision of 0.1 percentage points for 2019 and 2020 and 0.2 for 2021 compared with the forecasts made in October 2019.
“The downward revision primarily reflects negative surprises to economic activity in a few emerging market economies, notably India, which led to a reassessment of growth prospects over the next two years. In a few cases, this reassessment also reflects the impact of increased social unrest,” said the IMF.
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