Mideast Oil Importers Under Strain, Oil Exporters Faring Well

Corrective measures are needed to lower oil-importers’ vulnerabilities

Oil exporters are benefiting from high oil prices and strong buffers

International community has key role in supporting Arab Spring countries

In the ‘Arab Spring’ countries, political transition, pressing social demands, and an adverse external environment have combined to increase the near-term risks to macroeconomic stability, the IMF said in its latest assessment.

Moreover, many countries are faced with diminished room for policy maneuver, having eaten into their foreign exchange and fiscal buffers during 2011. There is a risk that problems in the region and elsewhere could derail the historic transition that is underway and managing this risk is a shared international responsibility. “Arab Spring countries would need support during their transitions, both in managing natural resources and in gaining global market access,” IMF Managing Director Christine Lagarde told a news conference at the 2012 IMF–World Bank Spring Meetings in Washington, D.C.

Middle East oil exporters are benefiting from high oil prices, though they face fiscal sustainability and structural issues, including the need to create jobs for their growing working-age populations, further diversify their economies, and develop their financial markets to support economic growth.

“While we are rightly focused on the short-term macroeconomic challenges, we should not lose sight of the medium-term challenges of modernizing and diversifying the economies of the region, creating jobs, and providing fair and equitable opportunities for all,” Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, told reporters.

Varied Growth

The IMF’s Regional Economic Outlook Update for the Middle East and Central Asia, released April 20, projects growth in the Middle East and North Africa region at 4.2 percent in 2012, modestly higher from 2011.

Growth among the region’s oil importers (excluding Syria)—Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, and Tunisia—is set to grow modestly by 2.2 percent.

By contrast, the economies of the oil-exporting countries—Algeria, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates, and Yemen—are expected to expand by 4.8 percent, largely because of higher oil prices and oil production (see table).

Oil-importing countries

For this group of countries, growth is faltering, unemployment is on the rise, and...