Baku, Azerbaijan, May 2
By Leman Zeynalova – Trend:
The OPEC and non-OPEC agreement on oil output cut has helped improve the outlook for oil prices in the near term, but prices remain volatile, the International Monetary Fund (IMF) said in its updated Regional Economic Outlook.
“Over the medium term, oil prices are expected to remain low and highly uncertain, so further sustained fiscal adjustment remains critical,” said the report. “This fiscal consolidation means non-oil activity will remain modest in most countries.”
The baseline medium-term oil price outlook is little changed from that of the October 2016 Regional Economic Outlook.
“The key uncertainties are related to the degree of compliance with the OPEC agreement, prospects for higher production by countries either exempt or not participating in it, and lower oil demand given the downside risks to global growth,” said IMF.
Growth in MENAP (Middle East, North Africa, Afghanistan, and Pakistan) oil-exporting countries is expected to slow in 2017 because of the oil production cuts agreed to under the terms of the recent OPEC deal, according to the report.
“In particular, non-oil growth in the countries of the Gulf Cooperation Council (GCC) is projected to strengthen from almost 2 percent in 2016 to 3 percent in 2017. In contrast, non-oil growth in Algeria is expected to continue to slow,” said the report.
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