This issue of the MENA Quarterly Economic Brief (QEB) traces the economic effects of the latter development—removing sanctions on Iran—on the world oil market, on Iran’s trading partners, and on the Iranian economy.The most significant change will be Iran’s return to the oil market. The World Bank estimates that the eventual addition of one million barrels a day (mb/d) from Iran, assuming no strategic response from other oil exporters, would lower oil prices by 14 percent or $10 per barrel in 2016. Oil importers, including the European Union (EU) and United States (US), will gain while oil exporters, especially the Gulf countries, will lose.
The over-50% decline in world oil prices—from US$115 a barrel in June 2014 to less than US$50 today—will have significant consequences for the economies of the Middle East and North Africa (MENA) region. This report titled " Plunging Oil Prices", focuses on the implications of low oil prices for eight developing countries, or the MENA-8 (oil importers: Egypt, Tunisia, Lebanon and Jordan and oil exporters: Iran, Iraq, Yemen and Libya) and the economies of the GCC (Gulf Cooperation Council), who play a major role in providing funds in the form of aid, investment, tourism revenues and remittances to the rest of the countries of the region.
This report assesses the macroeconomic performance of seven of the MENA countries: Egypt, Tunisia, Iran, Lebanon, Jordan, Yemen and Libya. All of these countries experienced rapid economic growth during 2000-10, and suffered a sharp economic slowdown in the aftermath of 2011. The brief focuses on the challenges facing these countries with a closer look at the actual growth performance in comparison with their forecasts and highlights the limitations of forecasting in the wake of the 2011 uprisings; and at the consequences of the growth slowdown, including unemployment, where perceptions may diverge from reality. The story is told in fourteen charts.
Ongoing regional tensions, together with a challenging external environment, have hit the economies of the Middle East and North Africa (MENA) region hard. Economic growth is slowing, fiscal buffers are depleting, unemployment is rising, and inflation is mounting in seven transition countries in the region.
While the focus has been on the recent change in government in Egypt, five countries in the Middle East and North Africa Region, including Egypt, Tunisia, Lebanon, Jordan and Iran are facing a growth slowdown, rising fiscal deficits and debt, and high unemployment and inflation.