By Sami Zaptia.
Tripoli, 8 April 2014:
The Middle East and North Africa could be turning the economic corner in 2014, stated the . . .[restrict]IMF today in its April 2014 World Economic Outlook report.
Growth was tepid across the Middle East and North Africa, Afghanistan, and Pakistan (MENAP) in 2013,it reported, as declines in oil production and weak private investment growth amid continued political transitions and conflict offset increases in public spending.
Economic activity will strengthen in 2014–15 as export growth improves in line with trading partners’ recoveries and public and private investment accelerates. However, weak confidence, high unemployment, low competitiveness, and in many cases, large public deficits (as is the case in Libya due increased state expenditure on wages and subsidies and reduced oil exports) will continue to weigh on economic prospects in the region.
Risks are tilted to the downside on slow progress in reforms during complex political transitions. Reforms to raise and diversify potential output and improve competitiveness and resilience are essential for achieving sustainable and inclusive growth and creating jobs.
Specifically for MENAP oil exporters such as Libya, the IMF says that economic activity moderated in 2013 to about 2 percent, less than half the growth rate experienced in recent years. Growth in the non-oil economy was supported by sustained public investment in infrastructure and private credit expansion.
However, tepid global oil demand, increased oil supply from the United States, and regional oil supply disruptions—mainly those in Libya, where a wave of instability caused oil output to fall to about one-third of capacity—slowed growth in the oil sectors.
As oil output stabilizes alongside strengthening global activity and sustained consumption and investment, total GDP growth is expected to rise to about 3½ percent in 2014 . Softening food prices are expected to contain inflation at less than 5 percent in most oil exporters.
The WEO’s futures-based forecast for the nominal Brent oil price is $108 a barrel in 2014, declining to $103 in 2015. [/restrict]