World Bank says Mena growth remains fragile

15 January 2015

There is a global slowdown, but low oil prices give countries in the region chance to reduce subsidies

Growth in the Middle East and North Africa (Mena) region remains “fragile and uneven”, despite some pockets of stabilisation, says the Washington-based World Bank in its biannual report.

The bank’s comments follow its forecasts that global growth was slowing, and that the world’s economies were over-reliant on the US’ strong economic recovery.

Global slowdown

It revised its global growth forecasts to 3 per cent for 2015 and 3.3 per cent for the following year, declining from its June forecast of 3.4 per cent and 3.5 per cent respectively.

Middle East economies are showing mixed results, with oil importing nations generally reporting stagnating growth levels while oil exporters have recovered following a slight contraction in growth in 2013.

Risks ahead

Average regional growth is forecast to grow gradually in the coming years, rising to 3.5 per cent in 2017 from 1.2 per cent in 2014, the bank says.

The World Bank warns of “considerable” risks facing the region, due to regional turmoil and volatile oil prices.

A lack of structural changes and high unemployment are still major challenges for the region.

The World Bank adds that the current low oil prices do offer oil importing countries the chance to remove or reduce their expensive energy subsidies.

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