IMF forecasts subdued growth for Middle East and North Africa region

Economic conditions in the Middle East and North Africa were set to improve only modestly in 2017 amid a slump in oil prices and conflicts in multiple countries, the International Monetary Fund said.

Growth would expand at a 3.4% pace next year, the same as in 2016, the Fund said in its regional economic outlook for October, stressing the need for "structural transformations" to raise the area's medium-term prospects.

Oil prices were projected to remain "low" over coming years and activity in Gulf Cooperation countries was expected to slow.

Indeed, the IMF's forecasts called for fiscal tightening and a decline in liquidity to sap the GCC's strength, with non-oil growth expected to brake from 3.75% in 2015 to 1.75% in 2016, albeit with a pick-up to a 3% pace in 2017.

However, over the medium-term the annual rate of GCC non-oil growth would be constrained to 3.5%, below the 7.0%-clip observed over 2000-14.

"Further fiscal adjustment is needed, which will require difficult policy choices and the adoption of well-calibrated measures to protect the vulnerable," the IMF added.