IMF raises Middle East growth forecast for this year

The International Monetary Fund on Tuesday raised its 2016 growth forecast for the Middle East and North Africa after a rebound in oil prices, but maintained its cautious outlook for Saudi Arabia.

The region, along with Afghanistan and Pakistan, is set to see economic growth of 3.4 per cent this year, better than a previous projection of 3.1 per cent, the IMF said.

At the same time it cut the growth forecast for 2017 to 3.3 per cent, down from 3.5 per cent in April, citing fallouts from "terrorism" and geopolitical tensions in its World Economic Outlook Update.

"In the Middle East, oil exporters are benefiting from the recent modest recovery in oil prices while continuing fiscal consolidation in response to structurally lower oil revenues," the IMF said.

"Geopolitical tensions, domestic armed strife, and terrorism are also taking a heavy toll on the outlook in several economies, especially in the Middle East, with further cross-border ramifications," it said.

The IMF maintained its growth projections for Saudi Arabia, the world's top crude oil exporter, at 1.2 per cent for this year and raised it slightly to 2 per cent for 2017.

Follow Emirates 24|7 on Google News.