{IMF} is expected to slow the growth of Gulf economies

{IMF} is expected to slow the growth of Gulf economies



05/04/2017 0:00

Cairo / Reuters
The IMF predicted slowdown GCC economies growth slowed in 2017 due to a severe oil production cuts agreed by the "OPEC" with independent producers.
The Fund stated in the report of the
prospects of the recently released regional economy, which includes the growth of the Middle East forecast
North Africa, Afghanistan and Pakistan, it is expected to slow overall growth in the Gulf states to 0.9 percent in 2017 from 2 percent in 2016 to accelerate again to 2.5 percent in 2018.
Fund forecast data show that the balance of current transactions in the GCC recorded a surplus of 1.8 percent of GDP in 2017 from a deficit
of 2 percent last year, to reach the surplus to 2.1 percent in 2018. the
fund added in his report "is expected to rising oil prices and to correct the financial situation of the General to re - aggregate current account for oil - exporting countries in the Middle East, North Africa, Afghanistan and Pakistan to develop close to balance this year. "
The predicted acceleration of overall growth in the non - oil sector this year , with the decline in
the pace of fiscal adjustment, pointing to an increase in its estimate of growth of non - oil Gulf countries to three percent in 2017 from 1.9 percent in 2016, to slow down again to 2.7 percent next year.
He continued: Although the overall growth in the GCC countries will be supported by recovery is expected in the oil production in the medium term, "the non - oil growth will remain constrained as a result of continuing fiscal austerity in countries that require substantial corrections" including Bahrain, Oman and Saudi Arabia.
The Fund adopt a cautious look at the "OPEC" agreement and its impact on the prospects for the oil market, noting although the agreement has helped improve the prospects of crude prices in the near term but prices are still volatile.
The IMF said "the medium term, it is expected that low oil prices remain surrounded by a high degree of uncertainty and therefore continue to correct public finances will continue to be a vital requirement."
The IMF praised the reforms implemented by some of the Gulf Cooperation Council ( GCC ) , led by
Qatar, Saudi Arabia and Oman
on energy prices and spending cuts.
And reduce many of the Gulf states energy subsidies after falling oil prices from above $ 100 a barrel in mid - 2014 to around $ 50 a barrel.
Some countries also resorted to cut spending on government projects that drive growth after the decline in oil export revenues , which is a major source of government revenues.
Between the Fund and the need to continue further reforms in energy prices and the application of value - added tax, pointing out that this correction planned in the financial situation of the
public " is necessary for fiscal sustainability demand in the long
term , despite the efforts that have already been made."
He noted that the pace of correction must be adapted to the circumstances of each individual country, adding that "countries with large financial reserves , such as Kuwait, Qatar and the United Arab Emirates can conditions corrected gradually to reduce the negative impact on the non - oil activity effects, but countries with smaller reserves will be required by move faster pace. "

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