No escape from inflation for GCC, warns IMF
Washington, April 10, 2008
Middle East oil powers are using their increased wealth to weather the global economic strife but cannot escape the inflation that has been fueled by their main export, the IMF has warned.
Inflation in Iran is predicted to peak at 20.7 per cent this year, the IMF's World Economic Outlook report on Wednesday said, leading a surge in prices across the Middle East.
The region's economies 'are becoming more diversified and benefiting from improved policies and structural reforms that are underway in many countries. This should strengthen the resilience of the region to a slowdown in the advanced economies.
Growth across the Middle East remains strong at 5.8 per cent across the region last year and hitting 6.1 per cent this year and next, the IMF said. All the major oil exporters would see stable growth this year.
Iran's economy was predicted to expand 5.8 per cent this year, unchanged from last year, before falling next year to 4.7 per cent. Saudi Arabia was predicted to see 4.8 per cent growth this year, up from 4.1 per cent last year and rising to 5.6 per cent next year.
Egypt's economy was predicted to advance 7 per cent this year and 7.1 per cent next year.
Lebanon's growth fell this year however to 3 per cent from 4 per cent last year and was only predicted to started recovering next year at 4.5 per cent.
In Iran, consumer price index is at 20 per cent and is near 14 per cent in Qatar and above 9 per cent in the UAE - a 19-year high.
The UAE and Oman have capped rents and Saudi Arabia has put subsidies on some food items because of higher prices. But the IMF said the inflation outlook was 'broadly balanced.'-TradeArabia News Service