ISTANBUL, Oct 3 (Reuters) - The World Bank forecast 2010 growth of 4 percent for the Middle East and North Africa region and said a projected oil price of $63 a barrel next year was sufficient to avoid a major crisis in oil producing states.
However it warned the region remained subject to significant downside risks because of its vulnerability to trade shocks, namely high dependence on fuel exports and reliance on food imports, and could see surging unemployment and poverty rates.
Countries in the area would see their fiscal space shrink significantly as governments tried to stimulate their economies and subsidise higher food prices, the bank said in a report.
Non-oil exporters Lebanon, Jordan and Djibouti had no fiscal space left, it added.
The area suffered a sharp decline in growth to a forecast 2.2 percent in 2009 from 6.1 percent the previous year.
Qatar would be a stand-out performer in the area, enjoying growth of 18.2 percent in 2009 and 16.2 percent in 2010 as major liquid natural gas (LNG) plants come on-stream, while Kuwait was seen contracting this year by 1.2 percent and Saudi Arabia by 0.9 percent.
'The Middle East and North Africa's (MENA) weak integration with global financial markets partially insulated the region from the first-round effects of the current economic downturn,' the World Bank said.
'But over the longer term, the region's ability to cope with shocks is hampered by the limited development of the financial sector, limited access to financial services by households and firms, and limited exposure to global financial markets.'
Only 10 percent of firms in the region use banks for their financing, the report said.
The bank urged governments in the area to spur private sector job creation, to try and reduce high youth unemployment rates.
(Reporting by Alexandra Hudson; Editing by Ruth Pitchford) Keywords: WORLDBANK MEASTAFRICA/ (alexandra.hudson@reuters.com; Tel: +905333044061, Reuters Messaging: alexandra.hudson.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
However it warned the region remained subject to significant downside risks because of its vulnerability to trade shocks, namely high dependence on fuel exports and reliance on food imports, and could see surging unemployment and poverty rates.
Countries in the area would see their fiscal space shrink significantly as governments tried to stimulate their economies and subsidise higher food prices, the bank said in a report.
Non-oil exporters Lebanon, Jordan and Djibouti had no fiscal space left, it added.
The area suffered a sharp decline in growth to a forecast 2.2 percent in 2009 from 6.1 percent the previous year.
Qatar would be a stand-out performer in the area, enjoying growth of 18.2 percent in 2009 and 16.2 percent in 2010 as major liquid natural gas (LNG) plants come on-stream, while Kuwait was seen contracting this year by 1.2 percent and Saudi Arabia by 0.9 percent.
'The Middle East and North Africa's (MENA) weak integration with global financial markets partially insulated the region from the first-round effects of the current economic downturn,' the World Bank said.
'But over the longer term, the region's ability to cope with shocks is hampered by the limited development of the financial sector, limited access to financial services by households and firms, and limited exposure to global financial markets.'
Only 10 percent of firms in the region use banks for their financing, the report said.
The bank urged governments in the area to spur private sector job creation, to try and reduce high youth unemployment rates.
(Reporting by Alexandra Hudson; Editing by Ruth Pitchford) Keywords: WORLDBANK MEASTAFRICA/ (alexandra.hudson@reuters.com; Tel: +905333044061, Reuters Messaging: alexandra.hudson.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
