IMF: Mideast under strain despite oil wealth

The world’s worst economic recession in about six decades is hammering the nations of the Middle East, with falling commodity prices severely straining economies and wealthy oil producers digging deep into savings to sustain spending.

The IMF’s latest World Economic Outlook, released Wednesday, offers another unwelcome reality check for the volatile region, where officials from the United Arab Emirates to Egypt, Iran to Lebanon have tried to cast a rosy glow on growth prospects.
Overall, Mideast nations are poised to see growth rates of about 2.5 percent this year, down from 6 percent in 2008, the IMF said. That level is still higher than overall global estimates, with the IMF projecting that world output would decline by 1.3 percent this year.

But the Middle East faces other challenges, including slumping oil prices, plus declining tourism revenues, exports and tightening liquidity and access to credit.

An over 60 percent fall in world oil prices since mid-July has siphoned off a key revenue source. That is despite the Organization of the Petroleum Exporting Countries’ efforts to engineer a price rebound.

AP