Pedestrians walk by the IMF HQ1 building ahead of the 2016 spring meetings of the International Monetary Fund and World Bank on April 6, 2016 in Washington, DC. (AFP)
The International Monetary Fund (IMF) has projected a four-percent growth rate for Iran
in 2016 while maintaining a gloomy outlook for Saudi Arabia.
Iran’s economy, which was flat last year, is set to grow by 4.0 percent this year and by 3.7 percent the next, said the IMF in its latest global forecast.
The monetary organization cut its combined growth projection for oil-exporting countries to 2.9 percent this year from a forecast of 3.8 percent in October.
IMF’s World Economic Outlook said the Saudi economy will only grow by 1.2 percent in 2016, the lowest in seven years, and by 1.9 percent next year.
The grim forecast for the Saudi economy comes despite the austerity measures taken by the Persian Gulf kingdom to cut spending and boost non-oil revenues after posting a record budget deficit of $98 billion last year.
Riyadh in December reduced huge subsidies on fuel products, electricity, water and other services in a bid to boost non-oil revenues and rationalize consumption, according to AFP.
“The steep decline in oil prices is weighing heavily on the macroeconomic outlook in Saudi Arabia,” said the IMF.
Fitch Ratings meanwhile lowered Saudi Arabia’s long-term credit rating, saying the plunge in oil prices had “major negative implications” for the world’s biggest crude exporter.
The IMF report predicted the economies of the Middle East
, North Africa, Afghanistan and Pakistan as a whole to grow by 3.1 percent in 2016 and 3.5 percent in 2017.
That is worse than a January projection of 3.6 percent for each year.
The outlook for the region, which grew by 2.5 percent last year, “has weakened considerably because of further declines in oil prices and intensifying conflicts and security risks,” the IMF said.
The oil-importing economies, such as Egypt, Pakistan and Tunisia, are together set to grow by 3.5 percent in 2016, down from 4.1 percent projected in October and worse than last year’s 3.8 percent expansion.