Overall economic growth for the Middle East region is forecast at 4.2 percent in 2012
Inflation will average 9.5 percent
In it latest World Economic Outlook report, the International Monetary Fund forecast that economic growth in the Middle East and North Africa will accelerate to 4.2 percent in 2012 from 3.5 percent in 2011.
The economies of oil importers will expand by 2.2 percent and crude exporters by 4.8 percent, the IMF predicts. Growth rates may reach 11 percent in Iraq, 6.6 percent for Kuwait and 6 percent for Saudi Arabia and Qatar.
“Growth in the region’s oil importers will be constrained by strong oil prices, anemic tourism associated with the social unrest in the region, and lower trade and remittance flows reflecting the ongoing problems in Europe. Among oil exporters, negative developments in the Islamic Republic of Iran are projected to be offset by increased oil production in Iraq and Saudi Arabia and a bounce back in Libya. Overall growth for the region is forecast at 4.2 percent in 2012, with oil producers buoyed by continued high oil prices, but inflation will average 9.5 percent.
Saudi Arabia, the biggest economy in the Middle East, increased government spending by 23 percent as the kingdom’s rulers sought to create jobs and build houses in order to avert the kind of popular uprising that swept other Arab countries.
“For oil exporters, governments need to seize the opportunity presented by high oil prices to move toward sustainable and diversified economies.”
Economic growth in the region will slow to 3.7 percent in 2013, the IMF forecasts.