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IMF: Volatile oil and politics take a toll on Gulf countries’ growth

by ChemOrbis Editorial Team - content@chemorbis.com
  • 29/10/2019 (14:29)
The International Monetary Fund (IMF) projected in its latest report published on Monday that growth in Gulf economies will more than halve this year when compared to 2018. The IMF’s regional outlook report expects growth to rise just 0.5% from 1.6% in 2018 mainly due to the prevailing volatility in oil prices as well as political tensions.

The GDP of the six Gulf Cooperation Council (GCC) countries, namely Saudi Arabia, Kuwait, the UAE, Qatar, Oman and Bahrain is foreseen to grow 0.7% this year, down from 2% in 2018, the fund said. The figure was further lower from a previous 2019 growth forecast of 2.1%, which IMF projected in April.

Nonetheless, the downward trend may shift in 2020 when increased activity in the oil and gas sectors is predicted to generate a rebound to 2.7% growth in the region, the IMF report added.

Saudi Arabia’s economy is projected to expand 0.2% in 2019, compared with 2.4% in 2018. The UAE’s economy is projected to grow by 1.6% compared with 1.7% last year, noted the report.

In the report that looks at 23 countries, the IMF expects a 9.5% drop in Iran’s economic growth for 2019 mainly due to the US sanctions while Libya may even suffer from a 19.1% decline this year.

For oil importing countries including Egypt, Jordan and Lebanon, the growth is expected to be hindered less with GDP at 3.6% in 2019, when compared to 4.3% in 2018.
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