Structural Reforms Will Boost MENA Growth

In its latest economic analysis report, Business Management International, a research firm that provides macroeconomic, industry and financial market analysis, delivers its economic outlook for the MENA in 2018.

According to the firm, the recovery of oil prices, as well as stabilizing output in oil-exporting economies will boost real GDP growth in the MENA region, while “the positive impact of structural reforms will boost growth in several major oil importers,” Morocco World News reported.

However, BMI is still apprehensive of the political unrest in the region, stating that it “risks weighting on investor sentiment,” limiting the acceleration of growth.

“Oil exporters will benefit from robust gains in prices,” reveals BMI, due to the favorable forecasts of Brent oil prices, expected to increase from $54.8 per barrel in 2017, to $65.0 per barrel in 2018, explains the firm.

As for oil-importing countries, the firm believes that “progress on structural reforms and overall improving political stability will drive economic activity.” BMI holds a “more favorable outlook” for economies with reform-minded governments, “such as Egypt and Morocco”.

While the firm forecast real GDP growth to slow to 3.8% in Morocco in 2018, down from 4.3% in 2017, “the economy will remain one of our long-term growth outperformers, a view which is underpinned by relative political stability and a favorable business environment, enabling the country’s transformation towards a manufacturing and exporting hub between Europe and Africa.”

Despite this optimistic outlook for the region overall, BMI “does not expect a dramatic acceleration in economic activity”. The firm forecasts real GDP growth of 3% for the MENA region in 2018, up from an estimated 2.6% in 2017.

For BMI, lower oil prices will continue to weigh on the pace of growth in oil-exporting economies, especially as diversification plans take time to yield results.