World Bank says wars, cheap oil hurting Middle East growth
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WASHINGTON - The World Bank said on Thursday that 2015 economic growth in the Middle East and North Africa likely came to just 2.6 percent, falling short of a 2.8 percent forecast in October as war, terrorism and cheap oil took their toll.
In a new report, the bank said five years of war in Syria and spillovers to neighboring countries have cost the region some $35 billion in lost output measured in 2007 prices, equal to Syria's gross domestic product that year.
The plunge in oil prices to around $30 a barrel from over $100 two years ago is causing major problem for the region's oil exporters, with government revenue falling sharply and budget deficits growing. The World Bank said Saudi Arabia's public debt would reach 20 percent of GDP in 2017, 10 times its level of 2.2 percent in 2013.
"The richest oil exporters in the region, Saudi Arabia, Qatar, Kuwait and United Arab Emirates, have large reserves that will enable them to run deficits over the coming years, although not far beyond that," the World Bank said in the report. "At current levels of spending, and an oil price of USD 40 per barrel, Saudi Arabia will exhaust its reserves by the end of the decade."
