It estimates a growth of 3.3 per cent across the Gulf Cooperation Council (GCC) economies this year, followed by a 2.8 per cent growth next year. This reflects a steady fall from the 3.4 per cent achieved in 2014.
The group of oil-rich countries, made up of all the Gulf states except for Iraq, has been hit hard by the decline in oil, which has lost around half its value since mid-2014.
The countries are also facing heavy deficits on top of the long-term slowdown. Saudi Arabia, the biggest economy in the region, is expected to post a deficit of 21.6 per cent this year, followed by 19.4 per cent next year. As the world’s biggest oil exporter, its government receives around 90 per cent of its revenues from the commodity.
It is not just the GCC that is suffering – the IMF estimates that the wider Middle East region will lose around £233bn in oil revenues this year.
The near-term outlook for the Middle East region is dominated by geopolitical and oil price developments. Regional uncertainties arising from the complex conflicts in Iraq, Libya, Syria and Yemen are weighing on confidence, the report said.