The World Bank projected real GDP growth in the Middle East & North Africa (MENA) region to slightly decelerate from 1.6% in 2018 to 1.5% in 2019, amid expectations of volatility in global financial markets and weaker global economic activity. It noted that the region's growth this year will be supported by improved economic activity in oil importers. Further, it projected growth in the MENA region to accelerate to 3.4% in 2020, amid ongoing policy reforms to diversify the economy and strengthen the business environment. But it considered that the modest recovery in the MENA region will be insufficient to address its low per capita GDP levels. Further, the Bank indicated that risks to the MENA region's outlook are mainly tilted to the downside and include tightening global financial conditions and a slowdown in activity in the region's key trading partners.

In parallel, the World Bank projected growth in the region's oil-exporting countries to slow down from 1.1% last year to 0.9% in 2019, reflecting stable growth in Gulf Cooperation Council (GCC) economies and an economic contraction of 3.8% in Iran due to U.S. sanctions. It forecast real GDP growth in GCC economies to be nearly unchanged at 2.1% in 2019, supported by the countries' planned diversification programs, infrastructure projects and medium-term reform plans. In contrast, it projected economic activity in non-GCC oil exporters to contract by 0.9% in 2019, as the expected expansion in Algeria, Iraq and Yemen will be offset by the contraction in Iran and the slowdown in Libya's growth. Further, the Bank anticipated real GDP growth in oil-importing economies to pick up from 3.8% last year to 4% in 2019, supported by improved tourism activity in Egypt and Tunisia. It noted that the economic performance of MENA oil importers remains tightly linked to developments in GCC countries, due to the positive impact on their growth from increased capital, FDI and remittance inflows from GCC economies.
Source: World Bank