The growth rate of Arab economies as a group is expected to be 2.3 percent in 2018 and rise to 3 percent in 2019, according to a new economic report from the Arab Monetary Fund (AMF).
According to the report, the growth rate of the GCC countries has been revised upward to 1.9 percent in 2018.
“This group of countries will benefit from the increase in oil production in the second half of the year,” the AMF said in a statement. “Also, the rising trend of international oil prices will support public finance and strengthen the fiscal space, which will support the implementation of economic diversification plans.”
In 2019, the growth of GCC economies is expected to rise to 2.5 percent.
For other Arab oil-exporting countries, growth expectations have been lowered to 1.8 percent, which the AMF says is a reflection of “the internal conditions in some of these countries which led to a notable decline in oil production in 2018 against 2017 levels.”
In 2019, however, this group of countries is forecasted to grow by approximately 3.9 percent. Growth expectations for Arab oil-importing countries remains unchanged at 3.9 percent in 2018 and 4.2 percent in 2019.
With regard to inflation, the AMF predicts noted that general price levels has risen in the first half of 2018 due to price increases in various sectors, including F&B, transportation, housing, water, gas and education across the region.
As a group, inflation in Arab countries is forecast at 11.40 percent in 2018, although the AMF believes inflationary pressures are expected to recede in 2019, bringing inflation to 8.3 percent.
In Arab oil-exporting countries, inflation is anticipated to increase from 5.7 percent in 2017 to 7.6 percent in 2018, before reaching 6 percent in 2019.
Inflation in the GCC is expected to reach 3 percent in 2018 and to decrease to 1 percent in 2019, while inflation in other Arab oil-exporting countries is expected to reach a higher level to around 8.1 percent in 2018 before falling to 6.2 percent in 2019.
In oil importing countries, the AMF predicts that inflation will increase to 14.5 percent in 2018, falling to 10.1 percent in 2019.
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