World Bank raises MENA growth forecast to 2.4% in 2021
Middle East and North Africa’s gross domestic product set to grow 2.4% in 2021 as rising crude prices and vaccine rollout boost recovery in oil-exporting countries, Bank says global.
The recent projection is 0.3 percentage point higher than the original forecast in January, the Washington-based lender said on Wednesday in its latest global economic outlook report.
“The region is expected to benefit from the recent rebound in oil prices, stronger external demand and less economic disruption from the Covid-19 epidemics,” the report said.
Growth of MENA economies is expected to accelerate to 3.5% in 2022 thanks to vaccinations, easing mobility restrictions and increasing oil production, which will generate more income for countries oil exporters.
The World Bank has also raised the outlook for global economic growth to 5.6% in 2021 – the fastest post-recession pace in 80 years – from 4% projected earlier this year as the world emerges from the economic downturn. pandemic. It follows similar revisions by the International Monetary Fund, which raised its global economic outlook for this year to 6 percent in April, from an earlier forecast of 5.5 percent.
Despite the rebound, global production will still be around 2% below pre-pandemic projections by the end of this year, the World Bank said.
“As the health crisis eases, policymakers will need to tackle the lasting effects of the pandemic and take action to stimulate green, resilient and inclusive growth while preserving macroeconomic stability,” said the Group chairman. the World Bank, David Malpass.
The coronavirus pandemic has also reversed poverty reduction gains in many low-income countries, further exacerbating inequalities between developing and developed countries, the lender noted.
In the MENA region, oil-exporting countries are expected to fare better this year as rising crude prices strengthen their finances.
“Among oil exporters, a stronger-than-expected rebound in GDP in the second half of 2020 laid the groundwork for growth to accelerate to an expected rate of 2.3% in 2021,” the World Bank said.
Oil prices are expected to average $ 62 per barrel in 2021 and 2022, which is significantly higher than the bank’s projections in January, he added.
Crude prices have increased by around 40% since the start of the year and are at their highest since October 2018. The oil market has benefited from the decision of the Opec + group to gradually reduce production cuts based on growing market demand.
Brent, the international benchmark for oil, traded at $ 71.66 at 7:02 am UAE time on Thursday. West Texas Intermediate, the main gauge for US crude, was trading at $ 69.42.
Saudi Arabia, the world’s largest oil exporter, is expected to grow 2.4% this year and 3.3% in 2022.
However, the pandemic continues to weigh on oil-importing economies. These are expected to increase by 2.8% in 2021, 0.2 percentage point lower than expected in January.
Egypt, which was the only economy in the Middle East to grow last year amid the Covid-19 epidemic, will see its growth slow to 2.3% in its 2021 fiscal year, according to forecasts by the World Bank.