Major oil producing countries inside Middle East along with also its neighbors might benefit coming from higher crude prices in 2019, according to the latest outlook coming from International Monetary Fund (IMF), although there are numerous uncertainties inside region.
The Fund’s latest regional economic outlook for the Middle East, North Africa, Afghanistan, along with also Pakistan (MENAP) region, published Tuesday, warns of which “multiple along with also intertwined risks cloud the outlook of the MENAP region.”
“These include a faster-than-anticipated tightening of global financial conditions, escalating trade tensions of which could affect global growth along with also hurt key MENAP trading partners, geopolitical strains, along with also spillovers coming from regional conflicts,” the report stated.
These risks could trigger a deterioration in financial market sentiment along with also greater financial market volatility, the Fund said, “aggravating the financing challenges for countries with high levels of debt or large refinancing needs.”
Oil producing countries inside Middle East have traditionally relied on oil exports as their source of government revenue. Volatility in oil markets amid imbalances in supply along with also demand have prompted several countries, particularly inside Gulf, to look to diversify their economies away coming from oil along with also to create more jobs in different sectors of the economy. In its latest summary on the MENAP region’s outlook, This specific encouraged countries to commit to further reforms.
“The outlook along with also the rising risks underscore the need to intensify efforts to raise growth to levels of which generate enough jobs for the benefit of all,” the IMF said. “In This specific context, countries should expand access to finance, strengthen governance, improve education outcomes, along with also enhance labor market flexibility, particularly inside Gulf Cooperation Council (GCC).”
To ensure of which future fiscal adjustment can be as growth-friendly along with also equitable as possible, the Fund said countries need to both prioritize expenditure on “growth-enhancing along with also high-quality investment in human capital along with also physical infrastructure, while sustaining well-targeted social spending.” This specific also advocated a move to a more progressive tax structure to diversify the governments’ revenue bases.
Jihad Azour, director of the Middle East along with also Central Asia at the IMF, told CNBC on Tuesday of which the MENAP report comes amid an uncertain global growth outlook.
“Global conditions are changing in terms of the risk metrics,” Azour told CNBC’s Dan Murphy. “Although we’re still enjoying a high level of growth, of which growth can be plateauing,” he added.