Besides, the report stated
that the economic indicators of Emerging Middle Eastern and African (MEA)
countries for the second half of 2015 pointed to a mixed bag of possibilities
and challenges.
It stated: “While growth in Saudi Arabia, the United Arab Emirates and
Egypt will pick up pace, Algeria and Nigeria will continue to grapple with the
decline in exports and depreciation in currency, as per the consultancy.”
The study provides
estimates for 2015, a short-term forecast for first quarter 2015 to fourth
quarter 2017, and medium-term forecasts from 2016 to 2018 for select
indicators.
Senior Research Analyst,
Emerging Market Innovation at Frost & Sullivan, Krishanu Banerjee, said: “Declining oil
prices multiply the significance of diversification. Therefore, the development
of non-oil industries like agriculture, banking, finance and tourism will
become central to economic progress.”
Saudi Arabia and the UAE
will withstand the pressure of sinking oil prices owing to strong non-oil
sector performance, the study highlighted, adding that high public spending on
education, health care, transport and water infrastructure will spearhead the
two economies. The expansionary Purchasing Managers’ Index of both countries
will brighten business and consumer sentiments throughout 2015.
However, the depletion of
Saudi Arabia’s foreign reserves will be a cause for concern in the last
quarters of 2015, it further stated.
As a major oil importer,
Egypt will stand to gain from low oil prices, although financial aid from
Middle Eastern countries is likely to drop in H2 2015 as oil revenues scale
down.
“Ongoing
political tension in the country will heavily dampen prospects in the tourism
sector. Largely reliant on earnings from oil and gas exports, Algeria and
Nigeria will reel from low oil prices,” the
study said.
The Algerian Government’s
investments in infrastructure as well as public welfare and subsidy schemes
will remain subdued in second half of 2015. Weak private consumption and an
ongoing power crunch signal a bleak outlook for the second half of 2015 in
Nigeria as well.
“Diversifying the
range of export products is an immediate requirement that MEA countries must
address to guard against price volatility and strengthen their economy in the
immediate future,” Frost
& Sullivan said.
Oil prices have been
plunging since last year June. From $115 per barrel, oil prices dropped to less
than $50 per barrel due to record over production and weak global demand. The
entry of Iran and slowdown in the Chinese economy is likely to put further
downward pressure on oil prices. (guardian)
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