DUBAI: The International Monetary Fund Tuesday slashed its economic growth forecast for the Middle East and North Africa to the worst level in more than a decade over Iran sanctions and regional unrest.
In its World Economic Outlook update, the global lender projected economic growth for the Middle East, North Africa, Afghanistan and Pakistan this year would be 1.0 percent, its worst since the IMF put them in one group in 2009.
The downgrade, the fifth in a year, is a half percentage point lower than its April projection.
The reduction is in large part due to a change in the IMF’s forecast for Iran’s growth “owing to the crippling effect of tighter US sanctions,” the lender said.
“Civil strife across other economies, including Syria and Yemen, add to the difficult outlook for the region.”
The price of oil, the main driver for revenues in the region, will also impact growth, the IMF added.
In 2018, the region saw 1.6 percent growth, down from 2.1 percent in the previous year.
The IMF in April projected Iran’s economy will shrink by a steep 6.0 percent this year, its worst performance since it contracted by 7.7 percent in 2012.
The new report provided no updated figures on the Iranian economy, the second largest in the region behind Saudi Arabia, but other reports predicted a deeper recession in the Islamic republic.
One report jointly prepared by the London-based Institute of Chartered Accountants in England and Wales and Oxford Economics, released early this week, said Iran’s economy is expected to shrink by 7.0 percent this year.
The report also predicted regional growth to be just 0.6 percent due to Iran sanctions and instability in the region.
US sanctions on Iranian oil exports were renewed in May and aim to halt Tehran’s overseas crude sales, which provide key revenues to the Islamic republic.
The IMF also attributed the lower growth projections to rising US-Iran tensions centered on recent incidents in the Gulf and unrest in several Arab nations.
“Civil strife in many countries raises the risks of horrific humanitarian costs, migration strains in neighboring countries, and, together with geopolitical tensions, higher volatility in commodity markets,” the IMF said.
The IMF raised its forecasts for Saudi economic growth this year by 0.1 percentage points, to 1.9 percent, and to 3.0 percent in 2020.
It attributed the boost to the development of the kingdom’s non-oil-related sectors.
The world’s largest oil exporter has substantially cut power and fuel subsidies as well as imposed fees on expatriates and a five-percent value added tax as part of a reform program to decrease dependence on oil.
IMF slashes Mideast growth projections over Iran sanctions
IMF slashes Mideast growth projections over Iran sanctions
- The IMF projected economic growth for the Middle East, North Africa, Afghanistan and Pakistan this year would be 1.0 percent
Closing Bell: Saudi main index extends gains as market opens wider to foreign investment
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Monday, gaining 153.61 points, or 1.38 percent, to close at 11,321.09.
The total trading turnover of the benchmark index was SR5.85 billion ($1.56 billion), as 207 of the listed stocks advanced, while 55 retreated.
The MSCI Tadawul Index increased, up 21.20 points or 1.41 percent, to close at 1,524.18.
The Kingdom’s parallel market Nomu gained 278.13 points, or 1.17 percent, to close at 24,013.03. This comes as 43 of the listed stocks advanced, while 29 retreated.
The best-performing stock was Saudi Pharmaceutical Industries and Medical Appliances Corp., with its share price surging by 7.26 percent to SR28.94.
Other top performers included Rasan Information Technology Co., which saw its share price rise by 6.51 percent to SR144, and Knowledge Economic City, which saw a 6.25 percent increase to SR13.09.
On the downside, the worst performer of the day was Najran Cement Co., whose share price fell by 2.11 percent to SR6.49.
Almasane Alkobra Mining Co. and Saudi Cable Co. also saw declines, with their shares dropping by 2 percent and 1.88 percent to SR103.10 and SR166.80, respectively.
On the announcement front, Riyad Bank has announced its annual financial results for 2025, with the total income from special commission of financing reaching SR24.1 billion, while net income from special commission of financing amounted to SR12 billion.
In a statement on Tadawul, the bank said: “Net income increased by 11.7 percent mainly due to an increase in total operating income and a decrease in total operating expenses.”
The bank further noted that the rise in total operating income was primarily driven by increased revenue from fees and commissions, trading activities, special commissions, gains on non-trading investments, and other operating sources. This growth was partially tempered by declines in exchange and dividend income.
“Net provision of expected credit losses and other losses decreased by 15.8 percent due to a decrease in impairment charge of credit losses and impairment charge for other financial assets, partially offset by an increase in impairment charge for investments,” it added.
RIBL’s share price closed at SR18.18 on the main market, marking a 1.43 percent increase.
