DOHA: Despite a growth in the MENA region’s oil exporting countries, the hydrocarbon production of these nations is likely to level off in 2013, putting a cap on the regional growth.
The completion of the current phase of Qatar’s LNG expansion programme is a key factor in the growth of the region’s oil and gas exporters, QNB Group’s analysis on IMF’s latest edition of World Economic Outlook noted yesterday.
The Group analysis that observed MENA growth has bucked the global trend, added: “Within MENA, growth in oil exporting countries has been stronger than in oil importers. However, hydrocarbon production is likely to level off in 2013, putting a cap on regional growth.
Saudi Arabian crude oil production averaged 9.5 million barrels per day in February 2013, down from its highs of over 10 million in 2012 when production was ramped up to ensure oil markets remained well supplied. The completion of the current phase of Qatar’s LNG expansion programme is another important factor in the levelling off of growth in MENA oil and gas exporters.”
Commenting on the Fund’s latest economic outlook that revised down its projections for 2013 global growth by 0.2 percent points to 3.3 percent, the QNB analysis noted that despite the regional instability caused by the ongoing crisis in Syria, oil importers are bouncing back slightly from the negative impact on growth of their political transitions. Growth in this group of countries picked up from 1.4 percent in 2011 to 1.9 percent in 2012 and is expected to rise further, although there remains considerable downside risks associated with the uncertainties of political transition. Growth may be helped by some positive indicators such as a recovery in tourism in Tunisia and better-than-expected agricultural harvests in Sudan.
Therefore, the difference between growth rates of oil exporters and importers is likely to narrow in 2013-14. MENA oil exporters are expected to grow by 3.2 percent in 2013 and 3.7 percent in 2014 while oil importers are expected to grow by 2.7 percent and 3.7 percent. This convergence will be encouraged by the expected downward trend in oil prices, which the IMF expects to be 2.3 percent lower in 2013 and a further 4.9 percent lower in 2014, on average. This would lower revenue for oil exporters, dampening economic performance, while it should reduce import costs for net importers, providing an economic boost.
The IMF’s forecasts for 2013 growth were revised down in each of its last three quarterly updates to the WEO, from a peak forecast of 4.1 percent made a year ago. The IMF now does not expect the global economy to achieve 4pc growth until 2014.
However, according to QNB Group, with growth in the world’s largest economies slowing, the IMF outlook for 2013-14 may be too optimistic and the trend of downward revisions to forecasts is likely to continue.
Reported by: The Peninsula, Gulf Times, Reuters, Bloomberg, Qatar Tribute, Caye Global News, BBC News
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