A file photo of the World Bank (Photo:Reuters)
Continued reforms are needed in the Middle East and North Africa (MENA) region in order to increase labour productivity and encourage innovation and competition, the World Bank said in a report published on Monday.
The World Bank's biannual MENA Economic Update report said that the growth in the region in 2018 was led by developing oil importers such as Egypt, which accounted for 8 percent of MENA's GDP that year, with a forecast of 5.5 percent growth in 2019.
The World Bank said that "the revival of growth in Egypt and other countries in the region has been due to domestic policies."
However, the report said that a slowdown in growth in exports to MENA's largest export markets, namely the the EU, the US and China, will have a negative effect on the region.
"Economic growth in the MENA region is set to drop slightly to 1.5 percent in 2019 from 1.6 percent in 2018," the report said.
The report also says that there is urgent need for more structural reforms that can raise aggregate labour productivity to raise growth and reduce external imbalances in the region.
"The Middle East and North Africa will have 300 million young people looking to enter the job market by 2050. The region can only succeed if it addresses the structural impediments to growth," said Ferid Belhaj, World Bank Vice President for the Middle East and North Africa Region, adding that the World Bank is calling on the region to embrace more ambitious reforms.
The report also says that the modest expected pickup in growth in the upcoming years in the region does not change the long-term picture of lacklustre growth of GDP per capita and persistent current account deficits in several developing economies in the region.