IMF: Gulf economy recovering but faces oil volatility

Agencies
November 13, 2018

Dubai, Nov 13: Economic growth in the energy-rich Gulf will recover in 2018 from a contraction last year but remains vulnerable to volatility in crude oil prices, the IMF forecast on Tuesday.

The global lender predicted that an overall energy price recovery from 2015-2016 lows would spur the economies of the six-nation Gulf Cooperation Council to grow by 2.4 percent in 2018 and 3.0 percent in 2019, after a contraction of 0.4 percent last year.

Grouping Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, the GCC states together pump over 17 million barrels per day and depend heavily on crude revenues.

But “the growth outlook for oil exporters remains subject to significant uncertainty about the future path of oil prices,” the IMF said in its Regional Economic Outlook for the Middle East and North Africa (MENA).

After their earlier extended recovery, oil prices have shed a fifth of their value in just one month, with Brent crude trading near its lowest price since April.

Growth in non-GCC oil exporters in MENA, which includes Iran, Iraq, Algeria and Libya, is projected to slow to 0.3 percent in 2018, from three percent the previous year, and pick up modestly to 0.9 percent in 2019, the IMF said.

“This largely reflects the expected impact of the re-imposition of US sanctions on Iran, which is likely to reduce Iranian oil production and exports significantly over the next two years at least,” the IMF said.

It projected Iran’s economy to shrink by 1.6 percent this year and 3.6 percent in 2019.

For oil-importing countries in MENA, growth is expected to continue at a modest pace of 4.5 percent in 2018, before dropping back to four percent next year, the IMF said.

This level of growth is not sufficient to create the required jobs for a region marred by instability and civil strife, it said.

Oil revenues for MENA exporters have increased by about $260 billion over the period 2016 to 2018.

This has mostly been due to a price rise generated by production cuts in nations belonging to OPEC, as well as non-OPEC producers.

The current account balance will turn from a deficit into a surplus and overall budget shortfalls will decline, the lender said.

The IMF urged GCC states to continue with and expand reforms, welcoming the imposition of value-added tax by Saudi Arabia and the UAE.

It also called on GCC countries to impose corporate and personal income tax in order to diversify their revenue streams.

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News Network
April 17,2024

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Russian President Vladimir Putin says Iran’s “tactful and wise” response to Israeli aggression on its consulate in Syria was the best way to punish the aggressor.

Putin made the remarks in a phone conversation with President Ebrahim Raeisi on Tuesday.

“What the Islamic Republic of Iran did in response to what happened criminally and in the light of the inaction of the [UN] Security Council, was the best way to punish the aggressor and represented the tactfulness and rationality of Iran's politicians,” Putin said.

The Russian president said the Israeli regime’s “terrorist act” against the Iranian consulate in Damascus was against all international standards and rules.

He also strongly criticized the United States and certain Western countries for creating tension in the region. “We believe that the Islamic Republic of Iran is one of the main pillars of stability and security in the region.”

“We firmly declare that we will respond to any action against Iran's interests with greater force and broader and more painful than the previous [response],” President Raeisi said in the phone call.

The Iranian president also said Tehran's response to the Israeli regime was within the framework of international law, saying Israel’s terrorist act was a clear violation of international law and a serious threat to global peace.

“The destructive role of the US and some western countries and the inaction and inefficiency of international institutions, including the United Nations and the Security Council, in dealing with the aggressive action of the Zionist regime in attacking the Iranian consulate in Syria caused the Islamic Republic of Iran to exercise its right to self-defense.”

Raeisi further thanked Moscow for its “principled and constructive” stance against the Israeli aggression in Damascus. 

He appreciated the diplomatic efforts of the Russian government to thwart the conspiracies of the United States and certain Western countries in the UN Security Council.

“To those countries that have adopted double standards in the face of the crimes of the Zionist regime and express concerns about escalating tensions in the region, we advise them to rather stop supporting the Zionists genocide and crimes against the oppressed Palestinian people to preserve peace and stability in the region,” Raeisi said.

Iran’s Islamic Revolution Guards Corps (IRGC) launched extensive missile and drone strikes against the occupied territories late on April 13 in response to Israel’s missile attack on the consular section of the Iranian embassy in Damascus.

Operation True Promise has inflicted damage on Israeli military bases across the occupied territories. The extent of damage is yet to be specified. 

Brigadier General Mohammad Reza Zahedi, a commander of the IRGC Quds Force, his deputy, General Mohammad Hadi Haji Rahimi, and five of their accompanying officers were assassinated in the Israeli attack on Iran’s diplomatic mission.

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News Network
April 14,2024

Qatar and Kuwait have banned any use of their airspace and air bases for attacks against Iran amid heightened tensions between Iran and the Israeli regime following an Israeli attack early this month on an Iranian diplomatic mission in Syria.

Reports on Saturday indicated that both Qatar and Kuwait had issued directives to the United States stressing that the US military will not be allowed to use air bases in the two countries for carrying out any potential airstrikes on Iran.

Qatar and Kuwait have also indicated that their airspace will not be available for any military action against Iran.

The US has military aircraft at the Ali Al Salem Air Base and Ahmed Al Jaber Air Base in Kuwait. The Al Udeid Air Base in Qatar is also the largest US air base in the West Asia region.

The directives issued by Iran’s two Arab neighbors come amid reports showing that Iran is preparing to respond to an Israeli airstrike that killed two of its senior military commanders in its consulate in the Syrian capital Damascus on April 1.

Washington has urged Iran to deescalate while saying that it will defend Israel in case it is attacked.

Iran, which has no direct relations with the US, has called on regional Arab countries to advise the US not to interfere if Israel is attacked.

Countries have been wary of a major confrontation in the region more than six months into an Israeli onslaught on the Gaza Strip.

Reports show they have already limited the ability of the US to use their airspace and air bases for attacks on resistance groups that are allied with Iran and have been attacking Israeli and US interests in the region since the start of the Israeli aggression on Gaza.

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News Network
April 7,2024

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Israel's relentless aggression against the Gaza Strip has now stretched over six months, and shows no sign of abating despite international calls for a ceasefire.

Israel launched the war on Gaza on October 7 after the Palestinian resistance movement Hamas waged the surprise Operation Al-Aqsa Storm against the occupying entity in response to the Israeli regime's decades-long campaign of violence against Palestinians.

At that time, the Israeli regime said attacking Gaza had two goals: eliminating Hamas and bringing back the hostages taken by the resistance group to Gaza. None of them have been achieved so far.

About 130 of the 250 Israeli captives taken during Operation Al-Aqsa Storm are still in Gaza after a provisional truce deal in December saw the exchange of a number of prisoners between the two sides.

Death toll

The conflict in Gaza has taken a devastating toll on Palestinians, with over 33,200 people, including 13,800 children, having lost their lives in 180 days of war, according to the Gaza Ministry of Health.

On top of that, around 76,000 people have been wounded – about four out of every 100 people in Gaza. The Palestine Red Crescent Society said this week some 1,000 children in Gaza have lost one or both of their legs.

A record-breaking 176 UN staff members and seven foreign aid workers have been killed in Gaza since October 7.

The Israeli army has killed the largest number of journalists of any modern conflict and detained more than 24. More than 140 journalists have been killed during the six months of war in the Israeli military's raids, bombardments and missile attacks across the Gaza Strip.

The humanitarian situation in Gaza has worsened day by day as the Israeli army continues to prevent aid from reaching the region, resulting in starvation being utilized as a tactic of warfare as over a million are at risk of starvation, with international groups warning of an “imminent” famine.

At least 27 Palestinians have already died from malnutrition and dehydration, according to international NGOs.

Displacement

More than 80 percent of Gaza’s population (Over 1.9 million Palestinians) have been intentionally displaced as the Israeli military ordered Palestinians to “go south” from the start of the war.

Some 1.4 million people are believed to be sheltering in Rafah, a small city on Gaza’s southern border with Egypt which is being bombarded by the Israeli forces every day as they have left no safe zone for the Palestinians to live.

Infrastructure damage

The estimated $18.5 billion in damage has affected public service infrastructure, resulting in 26 million tons of debris and rubble.

Over 290,000 housing units, equivalent to 62 percent of all homes in Gaza, have been damaged or destroyed by the war, leaving more than a million people homeless.

Only a fraction of hospitals, 10 out of 36, are operational following severe damage, leading to overwhelming strain on their limited resources.

Al-Shifa Hospital, the largest medical facility in Gaza, has been left severely damaged and burned after enduring a relentless two-week-long siege. The compound, which witnessed the loss of at least 400 lives and the arrest of hundreds, now faces a dire situation.

With an acute shortage of medicine and healthcare professionals on the brink of exhaustion and starvation, the majority of patients in Gaza are unable to receive the treatment they desperately need.

The scarcity of resources has forced medical teams to carry out operations and amputations without the availability of anesthetic, further exacerbating the already dire circumstances.

Political resolutions

On March 6, South Africa filed an “urgent request” with the International Court of Justice (ICJ) and requested for additional provisional measures issued on January 26.

In January, the ICJ ordered Israel to refrain from any acts that could fall under the Genocide Convention and ensure its troops commit no genocidal acts against Palestinians in Gaza. Israel described the genocide allegation as baseless.

On Friday, the United Nations Human Rights Council adopted a resolution, calling for a halt to all arms sales to Israel, and for the regime to be held accountable for possible war crimes in the Gaza Strip.

Moreover, the UN Security Council adopted a resolution last month, demanding an “immediate ceasefire” for the Muslim holy month of Ramadan. The resolution is the first to be approved by the council after three previous attempts during the past five months of war were vetoed by the US.

Meanwhile, during the months of war, protests around the world have been held in support of Palestine, calling for an immediate ceasefire and halt to arms sales to Israel.

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