Gross Domestic Product (GDP) growth across the Middle East region is expected to pick up later in 2002 and in 2003, particularly if security tensions ease and oil prices stay firm, projected the International Monetary Fund (IMF) in its recently released World Economic Outlook 2002 report.
Global economic slowdown, oil market developments, difficult regional security situation and country-specific policy pressures are all cited by the IMF as key factors shaping the Middle East’s prospects.
Over the past year, lower oil prices generated a contraction in growth in some of the region’s oil exporters, such as Kuwait and Saudi Arabia. Iran, in contrast, was able to offset losses in its oil sector thanks to recent progress with diversification. Robust growth of up to six percent looks set to continue for the Islamic republic.
Persisting security concerns presented an obstacle to growth for many countries in the Middle East, hindering economic growth particularly in Israel and the Palestinian territories. In Egypt, business activity and output further dropped in 2002 due to a sharp decline in tourism in the aftermath of the September 11 terror attacks on the US.
Lebanon’s considerable economic and financial strains were attributed to policies that have led to persistent budget deficits and high levels of public debt, asserts the report. While in Jordan, strong export performance has been underpinned by the authorities’ firm commitment to macroeconomic stability and structural reforms. — (menareport.com)