World Bulletin / News Desk
Economic growth in Saudi Arabia and most other Arab oil exporters will slow this year following production cuts aimed at propping up energy prices, the International Monetary Fund said Tuesday.
"The subdued pace of expansion reflects lower headline growth in the region's oil exporters, driven by the November 2016 OPEC agreement to cut oil production," the Washington-based IMF said.
It "masks the expected pickup in non-oil growth as the pace of fiscal adjustment to structurally lower oil revenues slows," the IMF added, referring to measures to cut budget deficits.
Members of the OPEC cartel of oil exporters, mostly from the region, agreed last year to reduce output by 1.2 million barrels per day from January 1 for six months, to support crude prices that had shed half of their value since mid-2014.
"Growth in Saudi Arabia, the region's largest economy, is expected to slow to 0.4 percent in 2017 because of lower oil production and ongoing fiscal consolidation, before picking up to 1.3 percent in 2018," the IMF said.
It said that growth is likely to dip in most Gulf Cooperation Council member states, which also include Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.
One bright spot is gas-rich Qatar which is expected to register 3.4-percent growth this year, compared with 2.7 percent in 2016. Kuwait's economy, in contrast, is forecast to shrink by 0.2 percent.
In Algeria, the IMF sees economic growth of 1.4 percent this year, down from 4.2 percent last year.
Growth is also predicted to slow sharply in Iran, to 3.3 percent in 2017, from 6.5 percent last year when the Islamic republic won a boost from the lifting of economic sanctions.
Iraq's economy is expected to contract by 3.1 percent in 2017 after surging by 10.1 percent last year on the back of expanding oil exports after sharp contractions in the previous two years.
The euro reached $1.1388 Wednesday, the highest level since a year earlier.
The IMF warned that "significant policy uncertainties imply larger-than-usual" risks to the US outlook on either side, since spending cuts could lower growth, while tax cuts could provide stimulus and expand the economy.
Now the VNO-NCW is calling for the Dutch parliament to reverse a 2015 decision to introduce a cap of 20 percent of annual pay on the bonuses which can be paid out to top managers in the banking industry.
The state-owned energy trading firm Lietuvos Duju Tiekimas said it signed the deal with the Texas company Cheniere Energy.
Adding to the upward pressure for oil is the crisis in the Middle East, where a Saudi-led blockade of Qatar has fuelled concerns of possible conflict.
Bourses in both Paris and Frankfurt dipped after a report from data monitoring company IHS Markit showed Eurozone private sector business activity slowed sharply in June while staying in expansion mode.
Analysts said that while the downturn in the headline readings was disappointing, the economy continued to put in a strong performance.
Crude prices stabilised after diving more than two percent on Tuesday on increasing fears of a global supply glut, as continued production in the US and elsewhere offsets an OPEC output cut deal.
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However, most other regional markets struggled after Monday's healthy gains, despite being given a positive lead from Wall Street where the Dow and S&P 500 closed at fresh record highs.
The purchase in one fell swoop gives Amazon, which until now has operated almost entirely on the internet, a big presence in the brick-and-mortar world on Main Street, with more than 450 stores in the US, Canada and Britain.
"The Bank of Russia Board of Directors decided to cut the key rate to 9.00 percent per annum," the bank said in a statement. The cut follows a half-point decrease in late April.