WASHINGTON, Oct 19 (KUNA) — The GCC is expected to grow by 1.7 percent the remainder of the year, and 2.3 percent in 2017, data from the International Monetary Fund (IMF) revealed Wednesday.
This follows the “dampening effect from fiscal consolidations and a broader weakening of private sector confidence in the face of lower oil prices,” the institution said in a press release previewing its Regional Economic Outlook for the Middle East and Central Asia report.
“The challenge now and into the future will be to find alternative sources of revenues and economic growth to maintain the level of prosperity many of (the oil exporters) have become accustomed to,” the statement added.
The IMF also said that GCC’s consideration of a value-added tax (VAT) is a “welcome move” which emphasizes “how committed these countries are to adjusting to the current difficult economic environment.”
The report projected “weak” 3.3 percent growth for oil exporters in general across the Middle East, North Africa, Pakistan, and Afghanistan in 2016.
The outlook was no better for those countries in 2017, with projected growth at 2.9 percent, the data showed.
“Structural transformations towards more dynamic private-sector driven economies, plans for which are being formulated in a number of countries, are needed to boost growth and create private sector jobs,” the IMF said.
Syria was excluded from the analysis, and non-oil growth outside the GCC is “likely to be almost non-existent this year due to the conflicts in Iraq, Libya, and Yemen.”
And while oil production has picked up “strongly” in Iran, international companies “remain cautious,” the institution noted.
The IMF said it does not expect the price of a barrel of oil to rise above USD 60 by 2021. (end)
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