The World Bank expected Iraq and Yemen’s economies to witness a remarkable recovery in the coming period.
Following the end of the war and the formation of a new government, Iraq is expected to grow at 2.8 percent in 2019 after a contraction of 1.7 percent in 2017 and a modest recovery of 0.6 percent in 2018, the organization said in its (Middle East and North Africa) MENA Economic Update report.
“Spending on reconstruction could potentially boost the country’s economy in the years ahead,” the report added.
Its economists expect a rapid recovery in Yemen in a potential scenario of contained violence although the risks remain high.
“Saudi Arabia’s Vision 2030, embodied in its recently announced expansionary budget for 2019, aims to boost non-oil activity and enhance economic diversification partly by increasing capital expenditures,” according to the report.
It said growth in GCC economies is expected to reach 2.1 percent in 2019, up by 0.1 percent from 2018.
The WB partly and indirectly attributed the revival of growth to policies that reduced the GCC’s reliance on oil revenues in addition to UAE’s investments in infrastructure in preparation to host Expo 2020.
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Iran is expected to contract sharply, the report noted, explaining that its real GDP is expected to have another recessionary year with -3.8 percent growth in 2019 after a 1.6 percent contraction in 2018, as oil output falls in part due to the US sanctions.
“Oil importers, as a group, are expected to grow four percent in 2019, slightly up from a 3.8 percent growth in 2018, when tourists flocked back to the region, especially to Egypt and Tunisia.”
“The uptick in tourism helped to modestly reduce trade imbalances and current account deficits,” the report explained.
The World Bank anticipates that Egypt will be one of the top performers among MENA oil importers, with a growth rate forecast at 5.5 percent for 2019, the strongest since 2008.
“It has been driven by rising natural gas production, revitalized tourism, and higher government investment spending.”
“Because rising revenues from VAT and income taxes have outpaced expenditures and subsidies have been cut several times, the fiscal deficit in Egypt has been narrowing for the past two years,” the report stressed.
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