Wars, cheap crude hurt­ing ME growth: World Bank

The Pak Banker - - FRONT PAGE -

The World Bank said that 2015 eco­nomic growth in the Middle East and North Africa likely came to just 2.6 per cent, fall­ing short of a 2.8pc fore­cast in Oc­to­ber as war, ter­ror­ism and cheap oil took their toll.

In a new re­port, the bank said five years of war in Syria and spillovers to neigh­bour­ing coun­tries have cost the re­gion some $35 bil­lion in lost out­put mea­sured in 2007 prices, equal to Syria's gross do­mes­tic prod­uct that year.

The plunge in oil prices to around $30 a bar­rel from over $100 two years ago is caus­ing ma­jor prob­lem for the re­gion's oil ex­porters, with govern­ment rev­enue fall­ing sharply and bud­get deficits grow­ing. The World Bank said Saudi Ara­bia's pub­lic debt would reach 20pc of GDP in 2017, 10 times its level of 2.2pc in 2013.

"The rich­est oil ex­porters in the re­gion, Saudi Ara­bia, Qatar, Kuwait and United Arab Emi­rates, have large re­serves that will en­able them to run deficits over the com­ing years, al­though not far be­yond that," the World Bank said in the re­port. "At cur­rent lev­els of spend­ing, and an oil price of USD 40 per bar­rel, Saudi Ara­bia will ex­haust its re­serves by the end of the decade." The re­port was is­sued as the World Bank is in talks on fi­nanc­ing with some oil pro­duc­ers in other re­gions, in­clud­ing Azer­bai­jan, Nige ria and An­gola.

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