IMF Expects GCC Non-Oil Growth to Increase Next Year

Economic activity in the GCC region is projected to slow this year despite continued expansion in hydrocarbon output. However, non-oil growth could marginally increase next year, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook.

    According to the IMF report on Middle East, North African and Pakistan (Menap) region, a GDP growth of 2.3% for the GCC as a whole for 2016, down from 4% last year and forecast a slight recovery next year to 2.5%.

    Fiscal tightening and declining liquidity in the financial sector are projected to reduce non-oil growth in the GCC to 1.75% in 2016, down from 3.75% last year, the report said.

    GCC non-oil growth is projected to pick up to 3% next year as the pace of fiscal consolidation eases. Over the medium term, less fiscal drag and a partial recovery in oil prices are projected to raise GCC non-oil growth to 3.5%, well below the 7% average during 2000–14.

    The Menap growth will be modest at 3.5% this year, with little improvement expected in 2017.