Increase in oil prices boosts Arab production growth to $2.7 trillion
Hike expected to continue at a rate of 3.9 pc to reach $2.8 trln in ’19
KUWAIT CITY, Dec 12, (KUNA): The oil prices hike boosted the expectations of acceleration in Gross Domestic Product (GDP) growth in the Arab region at an average rate of 2.8 percent to reach USD 2.7 trillion in 2018, the Arab Investment and Export Credit Guarantee Corporation “Dhaman” said on Wednesday.
Dhaman added in its quarterly publication issued today that this increase is expected to continue at a rate of 3.9 percent to reach USD 2.8 trillion in 2019.
This increase came despite the challenges facing the Arab economy due to international commercial pressure and regional conflicts ramifications, as well as the continuous resistance to financial reform programs, besides other factors, it said.
The governmental budgets performance might develop, so that countries fulfilling financial surplus will raise from one country in 2017 to five countries in the years 2018 and 2019, it added.
The improvement in oil prices and reforms in exchange prices will reflect on the foreign performance indices, with an improvement in current account performance in 12 Arab countries, including six ones achieving a financial surplus during years 2018 and 2019, it said.
It also expected the stability in a number of countries that has a foreign loan below 50 percent of its GDP at eight countries only in year 2018, while countries witnessing an improvement in foreign loan index will climb from too 11 countries, and will reach 12 by year 2019.
Reserves
The International Monetary Fund (IMF) date indicates that the international reserves in the region’s countries grew to USD 158 billion this year, while it might reach USD 111 billion in 2019, it said.
This is accompanied with the stability in a number of Arab countries in which the secure boarders that the reserves are covering the state’s incomes for a period of five months at ten countries during the year 2018, it added.
The number of Arab nations that are within the secure boarders in which the reserves cover the country’s income stabilized for a period of five months in ten countries in year 2017 compared to 2016, it added.
Regarding the direct foreign investments expectations in the Arab countries, it witnessed an increase in some Arab countries like UAE and Egypt.
Dhaman called on the Arab countries to fulfill a sustainable growth and improve its economic indices with continuing the financial, economic, and legislative reform programs, which would reflect positively in its economies and attract trade and investments in general.
It also advised the region’s countries to move to upward tax structure, and to adapt more active policies to improve the investment atmosphere and encouraging a dynamic private sector to increase the levels of private investments.