(Persia Digest) – The International Monetary Fund has cut its growth forecast for the Middle East, North Africa, Afghanistan and Pakistan region to just 1% for this year, down from a figure of 1.5% it was touting as recently as April.
Dominic Dudley writes in Forbes that in its latest World Economic Outlook report, published on July 23, the Washington D.C.-based organisation said the lower forecast was largely due to a downward revision to the outlook for Iran, “owing to the crippling effect of tighter U.S. sanctions”.
All this is in line with the gloomier outlook for the region expressed by many economists in recent weeks. Concerns about geopolitical instability and the impact of the recently-agreed extension to the Opec+ agreement to cap crude production are weighing on sentiment.
The latter issue is a particular concern for one of the region’s most important economies: Saudi Arabia.
Riyadh-based bank Jadwa Investment recently cut its growth forecast for the kingdom's economy for 2019 from 2% to 1.6%, due to weakness in the oil sector. It is expecting the oil sector to expand by just 0.3% this year.
Others are even more pessimistic. Oxford Economics is forecasting growth of just 0.5% for the Saudi economy this year, with the oil sector contracting by 1.8% as a result of the extension to the Opec+ agreement announced in late June.
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