IMF: Oil, conflict create Middle East woes

Syria's gross domestic product alone down by at least 50 percent.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Oct. 21, 2015 at 7:39 AM
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DUBAI, United Arab Emirates, Oct. 21 (UPI) -- Fiscal deficits are mounting for countries in the Middle East, North Africa and Central Asia because of lingering conflict and low oil prices, the IMF said.

The International Monetary Fund said the region as a whole should witness stagnant economic growth of around 2.5 percent for 2015. Conflict, the IMF said, is taking a "horrendous" toll on the region and a weak crude oil market is making matters worse.

"For the region's oil exporters, the fall in prices has led to large export revenue losses, amounting to a staggering $360 billion this year alone," Masood Ahmed, the IMF's regional director, said from Dubai.

Crude oil prices spiked briefly in late September when Russia entered the simmering conflict in Syria on the side of Syrian President Bashar al-Assad. According to the IMF, the conflict alone has nonetheless led Syria's gross domestic product to contract by around 50 percent since fighting first erupted in 2012.

For a country like Yemen, where operators have been forced to halt work because of fighting, GDP is down about 30 percent for the year, the IMF reports.

As a whole, the IMF finds many regional governments are drawing on extra reserves or pulling back on spending, though fiscal deficits are still expected to run at about 13 percent of GDP for countries that rely heavily on oil export revenue.

One bright spot, the IMF said, may be Iran, where sanctions relief is expected to lead to growth of around 4 percent for the member of the Organization of Petroleum Exporting Countries.

"With the easing of international sanctions, the country's economic prospects have improved substantially and, through increased trade and investment, benefits are expected to flow to its economic partners as well," Ahmed said.

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