World Bank: Le­banon GDP growth at 1.3 pct in 2019

Body says growth in re­gion cred­ited to ac­tiv­ity of oil ex­porters and im­porters

The Daily Star (Lebanon) - - BUSINESS -

BEIRUT: The World Bank pro­jected Le­banon’s GDP growth in 2019 at 1.3 per­cent com­pared to 1 per­cent in 2018.

It also fore­cast Le­banon’s GDP growth in 2020 and 2021 at 1.5 per­cent and 1.5 per­cent re­spec­tively.

The pro­jec­tion of Le­banon’s GDP growth was part of the World Bank’s over­all as­sess­ment of the Mid­dle East and North Africa.

“Growth in the Mid­dle East and North Africa is es­ti­mated to have im­proved to 1.7 per­cent in 2018, con­trib­uted by ac­cel­er­a­tion in ac­tiv­ity of both oil ex­porters and im­porters,” the World Bank said in a state­ment.

It added that growth among oil ex­porters is es­ti­mated to have strength­ened in the year just ended.

“Among the coun­tries of the Gulf Co­op­er­a­tion Coun­cil, in­creased oil pro­duc­tion and prices have eased fis­cal con­sol­i­da­tion pres­sures, en­abling higher pub­lic spend­ing and sup­port­ing higher cur­rent ac­count bal­ances,” the state­ment said.

Among non-GCC oil ex­porters, ane­mic growth in Iran as­so­ci­ated with U.S. sanc­tions has been a drag on re­gional growth. Growth in Al­ge­ria is es­ti­mated to have ac­cel­er­ated to 2.5 per­cent in the year just ended, sup­ported by pub­lic spend­ing.

“Egypt, an oil im­porter, grew a faster 5.3 per­cent last fis­cal year as tourism and nat­u­ral gas ac­tiv­ity con­tinue to show strength, un­em­ploy­ment rate has gen­er­ally fallen, and pol­icy re­forms progress. Fa­vor­able agri­cul­tural har­vest and tourism helped sup­port growth in Mo­rocco and Tu­nisia in 2018, which are es­ti­mated to grow at a 3.2 per­cent and 2.6 per­cent rate, re­spec­tively,” the World Bank said.

As for out­look, the World Bank said re­gional growth is pro­jected to rise to 1.9 per­cent in 2019.

It added that de­spite slower global trade growth and tighter ex­ter­nal fi­nanc­ing con­di­tions, do­mes­tic fac­tors, par­tic­u­larly pol­icy re­forms, are an­tic­i­pated to bol­ster growth in the re­gion. “Growth among oil ex­porters is ex­pected to pick up slightly this year, as GCC coun­tries as a group ac­cel­er­ate to a 2.6 per­cent rate from 2 per­cent in 2018. Higher in­vest­ment and reg­u­la­tory re­forms are an­tic­i­pated to sup­port stronger growth in the GCC. Iran is fore­cast to con­tract by 3.6 per­cent in 2019 as sanc­tions bite. Al­ge­ria is fore­cast to ease to 2.3 per­cent after a rise in gov­ern­ment spend­ing last year ta­pers off,” the World Bank said.

It is ex­pected for Egypt to achieve a higher growth of 5.6 per­cent at the end of 2019, as in­vest­ment is sup­ported by re­forms that strengthen the busi­ness cli­mate and as pri­vate con­sump­tion picks up.

But the World Bank ex­pressed con­cern about the grow­ing risk fac­tors in the re­gion as a re­sult of con­flicts and eco­nomic slow­down.

“Risks to the re­gional out­look are tilted to the down­side. New con­flicts in frag­ile economies can es­ca­late and in­flict even greater dam­age to in­comes and eco­nomic ac­tiv­ity, not to men­tion health and wel­fare; and may com­pound the im­pact of the refugee cri­sis on host and ori­gin economies,” the state­ment added. –

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