Economic growth of the oil-exporting countries in the Middle East North Africa (MENA) region has been projected to be at 2.3% in 2016, according to the regional outlook report by FocusEconomics – a market leader in the economic analysis and forecasts. It is lower than 2015’s growth increase of 2.4%, the absolute decrease in growth mirrors the subdued oil price growth.
Since its launch in 1999, FocusEconomics has been providing economic analysis and forecasts of 127 countries in Asia, Africa, Europe and Americas. The company has also been giving price forecasts for 33 key commodities.
Supported by an extensive global network of analysts, FocusEconomics has established itself as a trustworthy and reliable source for accurate analysis and forecasts.
Although the growth rate of 2016 has been the weakest since the financial crisis hit the world in 2009, it is expected that in 2017, Mena will improve as oil prices will increase slightly and global economic dynamics will become more stable.
The report further illustrated that more than 1% point had been cut off from the 2016 economic outlook for oil producing countries since February of 2015.
“The glaring consequence of the decline in oil prices has been a sharp deterioration in the aggregate fiscal and current account balances of the MENA economies. While the region as a whole has enjoyed an enviable current account surplus due to massive capital inflows stemming from oil revenues in the past decade, this situation started to change in 2014 and, last year, the region had the first aggregate current account deficit in nearly two decades,” the report noted.
According to the report, global oil glut is the direct result of supply and demand having an influence on oil prices – weaker global growth and increase oil output widened the mismatch between supply and demand.
Forecasts by Focus Economics
Head of Economic Research at FocusEconomics, Ricard Torne said that the MENA growth would be stronger at 2.8% in 2017.
Forecast by Focus Economic predicts that current account deficit will continue till 2019. Saudi Arabia, an oil-export driven economy had high current account surpluses during the period 2010-2013, averaging a GDP of almost 20%, suffered gravely when the oil prices started to plummet in 2014. In 2014, the GDP fell to 9.8% and went further down in 2015 to 8.3%; this year deficit will remain at 8.6% while recovering slightly year on year until it reaches surplus in 2020.
“Going forward, growth will likely pick up, but it will always stay below the 4% threshold,” the regional outlook report explained.
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