The economic activity in the Middle East and North Africa (MENA) region has shown surprising resilience in 2016 despite mounting political and economic headwinds, according to a report recently released by the economic analysis and forecasts provider FocusEconomics. The report reviews the performance of the region throughout 2016.
While the region managed to accelerate despite a challenging economic and political climate, the Gulf Cooperation Council (GCC) countries have performed poorly in 2016. The low oil price since mid-2015 forced GCC countries to implement harsh austerity measures in order to control their budget deficits, according to the report
The company estimated in its analysis that the region’s aggregate gross domestic product (GDP) expanded by 2.7% in 2016, compared to 2.6% growth in 2015.
The figures of 2016 are the results of the diverging economic trends within MENA. “The region has greatly benefited from Iran’s reintegration into the global economy and its consequent surge in oil shipments. Another positive note for 2016 was Iraq’s economic rebound following 2015 dismal performance when the Islamic State occupied large swaths of lands in the country,” the report said.
In regard to Egypt, FocusEconomics said that the Egyptian pound has lost more than half of its value since the liberalisation of the exchange rate in November; however, the efforts of the government to push forward reform-oriented policies to encourage investments and revive the economy managed to grow a mediocre 4.3% in fiscal year 2015/2016.
FocusEconomics expected a gradual increase of US dollar inflows and investors as well as an expansion of GDP by 3.5% in 2017. It also expected inflation to reach an average of 18.9% in 2017, and 14.6% in 2018.