2009 is going to be a tough year: IMF (Q & A)

Q) In your outlook last October, your department forecast 6 per cent growth for the Middle East and Central Asia. Now you forecast growth of just 2.6 per cent. Why have things deteriorated so much?

A It has gone down a lot. But when you look at that number, you want to distinguish between the oil importers and the oil exporters. And when you look at oil exporters you want to disaggregate the oil GDP and non-oil GDP. Oil GDP for that group is going down by 3 per cent or 3.5 per cent this year. But that’s simply saying that oil production is going down. The more meaningful number for oil exporters is non-oil GDP, which is going up by between 3.5 per cent and 4 per cent. That’s a reflection of the fact that they’ve decided, most of them, to continue to spend. Particularly for capital projects. And this is softening the impact of oil prices on them, and it’s protecting their neighbours a little bit, because of the linkages they have with their oil imports.