The World Bank projected Lebanon’s GDP growth in 2019 at 1.3 percent compared to 1 percent in 2018. It also forecast Lebanon’s GDP growth in 2020 and 2021 at 1.5 percent and 1.5 percent respectively.
The projection of Lebanon’s GDP growth was part of the World Bank’s overall assessment of the Middle East and North Africa.
“Growth in the Middle East and North Africa is estimated to have improved to 1.7 percent in 2018, contributed by acceleration in activity of both oil exporters and importers,” the World Bank said in a statement.
It added that growth among oil exporters is estimated to have strengthened in the year just ended.
“Among the countries of the Gulf Cooperation Council, increased oil production and prices have eased fiscal consolidation pressures, enabling higher public spending and supporting higher current account balances,” the statement said.
Among non-GCC oil exporters, anemic growth in Iran associated with U.S. sanctions has been a drag on regional growth. Growth in Algeria is estimated to have accelerated to 2.5 percent in the year just ended, supported by public spending.
“Egypt, an oil importer, grew a faster 5.3 percent last fiscal year as tourism and natural gas activity continue to show strength, unemployment rate has generally fallen, and policy reforms progress. Favorable agricultural harvest and tourism helped support growth in Morocco and Tunisia in 2018, which are estimated to grow at a 3.2 percent and 2.6 percent rate, respectively,” the World Bank said.
As for outlook, the World Bank said regional growth is projected to rise to 1.9 percent in 2019.
It added that despite slower global trade growth and tighter external financing conditions, domestic factors, particularly policy reforms, are anticipated to bolster growth in the region. “Growth among oil exporters is expected to pick up slightly this year, as GCC countries as a group accelerate to a 2.6 percent rate from 2 percent in 2018. Higher investment and regulatory reforms are anticipated to support stronger growth in the GCC. Iran is forecast to contract by 3.6 percent in 2019 as sanctions bite. Algeria is forecast to ease to 2.3 percent after a rise in government spending last year tapers off,” the World Bank said.
It is expected for Egypt to achieve a higher growth of 5.6 percent at the end of 2019, as investment is supported by reforms that strengthen the business climate and as private consumption picks up.
But the World Bank expressed concern about the growing risk factors in the region as a result of conflicts and economic slowdown.
“Risks to the regional outlook are tilted to the downside. New conflicts in fragile economies can escalate and inflict even greater damage to incomes and economic activity, not to mention health and welfare; and may compound the impact of the refugee crisis on host and origin economies,” the statement added.
The Daily Star