WASHINGTON, Oct 11 (Saba)--Economic growth is expected to decline in the Middle East and North Africa Region, Afghanistan and Pakistan (MENAP) this year due to the drop in oil production, uncertainty of political transitions and security issues, a recent IMF report has said.
Of course, the oil production drop has been blamed on a drop in global demand and interruption in crude supply, the report noted.
Economic growth dropped in oil rich countries in the first half of this year and Saudi oil production is expected to witness a slight drop throughout the year, according to the report, which also pointed that internal and external reasons represent key risks in this region.
And these risks are the main reason for negative developments including social chaos, soaring unemployment and inflation.
The report said that making economic gains depends, however, on increasing oil production and enhancing trust between oil importers and Middle East countries experiencing transitions.
Expecting a growth average of 2 to 3 percent this year, the report said the situation will improve in the region next year and the growth rate my increase to 4 percent. At a medium-term, economic growth depends on political and social stability, it said.
Furthermore, the report pointed that hydrocarbon production is expected to decline by 1% this year; the circumstances in Libya and Iran are to blame, it said.
Amid the political uncertainty and conflicts in the region, countries need to create jobs, make progress on fiscal control and structural reforms; and especially, oil exporters need to enhance their flexibility toward shocks of oil imports and to diversify other economic activities including the absorption of increasing workforce.