World Bank: Middle East oil exporters face low growth

Oil exporters in the Middle East and North Africa are expected to show lackluster economic growth because of lower oil prices, the World Bank said.

"This year appears to be one of the toughest for the region in a while," Shanta Devarajan, the bank's chief regional economist, said in a statement.

Growth prospects for the global economy have diminished or slowed in recent years. The World Bank estimates the economies in the Middle East and North Africa should grow by 2.3 percent this year, which is a half percent lower than the estimate for last year.

In terms of conflict, the report finds a lack of inclusive growth across the region is a de facto recruiting tool for terror groups like the Islamic State. Four states that to a varying degree rely on oil for export revenue -- Iraq, Libya, Syria and Yemen -- are mired in conflict, which is inhibiting the potential for economic growth.

"Applying an economic perspective, the report finds that the lack of inclusion in many forms is a major driver of radicalization," Quy-Toan Do, the lead author of the report said.

Iraq is a lead contributor to production from the Organization of Exporting Countries, while non-member states Syria and Yemen remain shuttered by war. The World Bank said oil exporters, meanwhile, should post growth of around 1.6 percent this year.

"Whereas previously we used to speak of two groups of countries in the region, each growing at different speeds, we are now seeing all countries growing at more or less the same, slow pace, albeit for different reasons," Devarajan said.

OPEC members meeting last week in Algeria agreed on a proposal to hold production levels steady in an effort to stimulate crude oil prices, which are up about $5 per barrel since. In July, the World Bank said Algerian oil production is on the decline because it can't attract foreign investments and because of ongoing project delays. The Algerian economy relies on exports for nearly all of its revenues.

Before last week's agreement, Algeria enacted a budget that called for a 9 percent cut in spending, assuming a price of oil at around $35 per barrel.