WASHINGTON: Losses from lower oil exports should sap up to $300 billion from economies in the Middle East and Central Asia this year, as countries in the region adjust to falling crude prices, the International Monetary Fund said on Wednesday.
Economies that are particularly dependent on oil exports will be hit hardest by the more than 50 percent decline in petroleum prices, the IMF said in an update to its outlook for the Middle East and Central Asia.
Oil prices are now hovering near six-year lows amid expectations of an abundance of supply tied to unexpectedly high production of US shale crude.
The IMF said, however, that falling crude prices will not translate immediately into major gains for oil importers in the Middle East and Central Asia, which have been hurt by the slowing growth prospects of key trading partners in the euro zone and Russia.
The IMF this week cut its forecasts for global economic growth to 3.5 percent for 2015 compared with an October outlook of 3.8 percent.
The IMF said nearly every exporting country in the Middle East and Central Asia is expected to run a fiscal deficit this year because of the oil price shock, which prompted the IMF to downgrade the region’s growth prospects by as much as 1 percentage point compared with its October forecasts, to 3.4 percent for 2015.
The losses are likely to reach 21 percentage points of gross domestic product in the countries of the GCC, or about $300 billion. In non-GCC countries and in Central Asia, the expected losses are $90 billion and $35 billion this year, the IMF said.
Source: Reuters
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