Washington - Middle Eastern economies are growing stronger despite a global economic slowdown, thanks in large part to surging oil prices that are helping boost exports, the International Monetary Fund said Wednesday. The Middle East is forecast to grow an average of 6.1 per cent in both 2008 and 2009, up from 5.8 per cent in the previous two years, according to the IMF's semi-annual World Economic Outlook report.
Egypt, though not an oil-producing country, leads the region with growth rates that are forecast to hold roughly steady at 7 per cent this year and 7.1 per cent in 2009.
Crude oil prices passed 112 dollars per barrel in New York trading on Wednesday. The Middle East's 10 oil exporters will grow a combined 6 per cent in 2008, up from 5.6 per cent a year earlier, the IMF said.
But the IMF warned that higher food prices, rents due to housing shortages, and strong domestic demand have all considerably boosted inflationary pressures in the last few months. Consumer prices were forecast to rise 11.5 per cent across the region over 2008, led by an expected 20.7-per-cent price hike in Iran.
Dampening inflation was the "key macroeconomic policy challenge" for the region, the IMF said.
Middle Eastern countries have used the higher oil revenue to boost government spending on infrastructure and social projects, the IMF said.
Governments have also expanded credit opportunities to the private sector, and the IMF encouraged a stronger build-up of private rather than state-owned firms across the region.
The region could yet be affected by the global economic slowdown if it leads to a significant drop in oil prices, the IMF said.
