The World Bank projected real GDP growth in the Middle East & North Africa (MENA) region to accelerate from 1.7% in 2018 to 1.9% in 2019 and 2.7% by 2021 due to improved activity in oil-exporting and oil-importing countries, and despite slower global trade growth and tighter external financing conditions. It forecast growth in the region's oil-exporting countries to increase from 1.2% last year to 1.4% in 2019 and 2.3% by 2021, supported by improved activity in Gulf Cooperation Council (GCC) economies amid higher investment and an improved regulatory environment in these countries. It expected real GDP growth in GCC economies to expand from 2% in 2018 to 2.6% in 2019 and to 2.7% in 2021, due to the countries' planned diversification programs, infrastructure projects and medium-term reform plans. In contrast, it projected economic activity in non-GCC oil exporters to be weak, as it expected Iran's real GDP to contract due to the U.S. sanctions, and for Algeria's growth to moderate due to reduced government spending in 2019. 

In parallel, the World Bank anticipated real GDP growth in oil-importing economies to pick up from 4.1% last year to 4.2% in 2019 and 4.7% by 2021, mainly supported by tourism activity in Egypt, Morocco and Tunisia. However, it considered that smaller oil-importing countries continue to struggle with elevated public debt levels and, for some, with challenges associated with an ongoing refugee crisis. Further, it indicated that risks to the MENA region's outlook are mainly tilted to the downside and include escalating global trade tensions, given that the region is interconnected to the European Union and China. In addition, it said that an abrupt tightening of monetary policy in advanced economies, such as in the U.S., could also weigh on capital flows into the MENA region and adversely affect foreign investor confidence in large GCC economies. In contrast, it pointed out that rising reconstruction spending in countries affected by conflict, such as Iraq, could support investment in physical and soft infrastructure.
Source: World Bank