Middle East economic growth slows dramatically, due in part to Iran sanctions

DUBAI, United Arab Emirates — The International Monetary Fund slashes its economic growth forecast for the Middle East and North Africa to the worst level in more than a decade over Iran sanctions and regional unrest.

In its World Economic Outlook update, the global lender projects economic growth for the Middle East, North Africa, Afghanistan and Pakistan this year would be 1.0 percent, its worst since the IMF put them in one group in 2009.

The downgrade, the fifth in a year, is a half percentage point lower than its April projection.

The reduction is in large part due to a change in the IMF’s forecast for Iran’s growth “owing to the crippling effect of tighter US sanctions,” the lender says.

“Civil strife across other economies, including Syria and Yemen, add to the difficult outlook for the region.”

The price of oil, the main driver for revenues in the region, will also impact growth, the IMF adds. In 2018, the region saw 1.6% growth, down from 2.1% in the previous year.

The IMF in April projected Iran’s economy will shrink by a steep 6.0% this year, its worst performance since it contracted by 7.7% in 2012.

— AFP