MENA oil export economies slow as demand drops

Economic growth in Middle East and North Africa oil-exporting countries is expected to fall to 3.25 percent in 2013 due to a relatively weak crude demand, after expanding by almost 5.7 percent last year, the International Monetary Fund said Tuesday.

But oil-importing MENA countries will experience healthier growth of 2.7 percent in 2013 compared with 1.9 percent in 2012, though this remains weighed down by political uncertainty, decreased trade with Europe and high commodity prices.

"For MENA oil exporters, 2012 was a year of robust growth, which reached about 5.75 percent," the IMF said in its annual World Economic Outlook.

The almost complete restoration of Libya's oil production and strong expansion in the Gulf helped to boost this growth, the report said.

"Economic growth is projected to fall to 3.25 percent in 2013 as oil production growth pauses against a backdrop of relatively weak global oil demand," it said.

MENA oil exporters include OPEC heavyweight Saudi Arabia, and the other five Gulf Cooperation Council members, as well as Algeria, Libya, Iraq, Iran, and Yemen.

The economy of Iran, hit by US-led sanctions over its disputed nuclear programme, will continue to contract in 2013, shrinking 1.3 percent this year compared with 1.9 percent in 2012, the IMF said.

Additional oil supplies from Iraq and Libya are expected to "more than offset a decline in oil exports from Iran this year," it said, while "lower net demand for Saudi Arabian exports is expected to result in slightly reduced production."

Non-oil gross domestic product is expected to grow by 4.2 percent this year, propped up by sustained high government spending, the IMF said.

A slight expansion is expected in 2014 with the growth rate increasing to 3.7 percent on the back of rising non-oil GDP growth and resuming oil GDP growth.

Saudi Arabia's economy will see a drop in growth from 6.8 percent in 2012 to 4.4 percent in 2013. The UAE economy will also see a slower rate of growth of 3.1 percent this year compared with 3.9 percent in 2012.

Kuwait is forecast to see a sharp drop in growth from 5.1 percent in 2012 to 1.1 percent this year, and Qatar's expansion will decrease from 6.6 percent in 2012 to 5.2 percent in 2013.

Iraq, on the other hand, will continue to widen its pace of expansion, topping its 8.4 percent growth last year to reach 9.0 percent in 2013, aided by surging oil production.

Last month the IMF predicted Iraq's oil output would gain about 10 percent, reaching 3.3 million barrels a day.

North African oil producer Algeria will see growth rising from 2.5 percent last year to 3.3 percent in 2013.

Libya's economy has expanded by over six percent, as oil pumping levels have risen close to those before the 2011 rebellion that toppled the regime of late dictator Moamer Kadhafi, the IMF said, without specifying figures.

Meanwhile, the IMF said "continued political uncertainty and bouts of social unrest across the Arab countries in transition, (and) significant regional spillovers from the escalating conflict in Syria," have continued to impact growth in oil-importing economies.

Other factors affecting this growth include "soft external demand from European trading partners, and persistently high commodity prices," the IMF added, citing food and oil in particular.

Oil importers include, Egypt, Jordan, Lebanon, Morocco, Sudan, Tunisia, Djibouti and Mauritania. War-torn Syria has again been excluded.

The aggregate growth of oil importers appears to have been prompted by Sudan's comeback from a 4.4 percent contraction in 2012 to 1.2 percent growth expected in 2013.

The economy in Tunisia, the cradle of Arab uprisings, is expected to register a 4.0 percent growth this year, compared with 3.6 percent in 2012, thanks to a rebound in tourism.

In Egypt, which is in talks with the IMF over a multi-billion-dollar loan, economic growth is expected to slow down to 2.0 percent in 2013, compared with 2.2 percent last year.