World Bank Upgrades Economic Growth Forecast for Mideast
Gross domestic product for the region may grow 4.1 percent, half a percentage point higher than the bank’s earlier forecast in May, the lender said in a report distributed in Washington. It revised upward economic growth forecasts for countries including Egypt, Iran and Saudi Arabia.
“This positive development is due to increases in public spending that have boosted demand across the region, increased oil production in most Middle East and North Africa oil exporters, and quicker than expected pickup in industrial production in Egypt,” the World Bank said in the report.
The economies of Egypt and Tunisia are struggling to recover from the aftermath of the popular uprising that toppled the two countries’ leaders this year. Persian Gulf oil producers, notably Saudi Arabia, have boosted output to make up for lost production in Libya, which was rocked by a conflict to end the four-decade rule of Muammar Qaddafi.
Egypt’s gross domestic product may expand 1.8 percent this year according to the report, up from an estimate of 1 percent in May. The economy may grow 3.5 percent in 2012, the World Bank said.
“We are being quite optimistic about resolving the political and economic uncertainty,” Caroline Freund, chief economist for the Middle East and North Africa at the World Bank, told a news conference. “If they are resolved, we could see stronger growth.”
The economy of Saudi Arabia, the world’s biggest oil exporter, may grow 5 percent this year. Iran, another member of the Organization of Petroleum Exporting Countries, may see 2.5 percent growth, the World Bank said.
Regional growth may slow to 3.8 percent in 2012 because of “the expected low global growth and oil prices,” Freund said.
To contact the reporter on this story: Alaa Shahine in Washington at firstname.lastname@example.org