The Takeaway: Mideast economies face ‘predominantly downside’ prospects due to Ukraine war
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Our take: Oil-fueled growth in Middle East to be ‘short-lived,’ says bank
Downside dominates forecast. The World Bank Global Economic Prospects report released this week projects significantly lower growth for the year — now 2.9%, significantly reduced from the January estimate of 4.1%, and about half of the 5.7% global expansion in 2021 — and a potentially prolonged period of widespread stagflation — sluggish growth and high inflation — as a result of the economic and energy disruptions caused by the Ukraine war.
Here is what the report says about the Middle East and North Africa (MENA) region:
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Oil prices can’t cushion blow. Higher oil prices mean an estimated 5.3% growth rate for the region, more than twice that of the global forecast — "the region’s fastest growth in a decade." But this rebound, according to the bank, "is expected to be short-lived."
