Baku, Azerbaijan, Oct. 5
By Leman Zeynalova – Trend:
Oil prices are expected to increase gradually over the forecast horizon, from an average of $43 a barrel in 2016 to $51 a barrel in 2017, reads the IMF World Economic Outlook October 2016.
“As in the April 2016 World Economic Outlook forecast, geopolitical tensions in some countries in the Middle East are assumed to remain elevated for the remainder of the year, before easing in 2017, allowing for a gradual economic recovery in the most severely affected economies,” said the IMF.
IMF added that in the Middle East, the recent modest recovery in oil prices is projected to have little impact on growth in oil-exporting countries.
“Most continue to tighten fiscal policy in response to structurally lower oil revenues, and financial sector liquidity continues to decline,” said the IMF. “Many countries in the region also remain affected by strife and conflict.”
IMF also said the Saudi economy is projected to grow at a modest 1.2 percent in 2016 in the face of fiscal consolidation, before picking up to 2 percent growth in 2017.
Growth rates in most other countries of the Gulf Cooperation Council are similarly projected to be held back by ongoing fiscal adjustment, said the IMF.
“In Iraq, higher-than-expected oil production has pushed up the projected growth rate for 2016,” said the report. “Growth in 2017 and beyond is expected to be held back by continued security challenges and lower investment in the oil sector limiting gains in oil production.”