The International Monetary Fund (IMF) has become more optimistic on the Middle East and North Africa’s economic growth prospects this year and the following as different parts of the region observe varying degrees of recovery.
It is to be noted that IMF recently stated that the worldwide economic recovery had lost its momentum, with an anticipated increase in output by 5.9% globally this year, 0.1% down from its July estimation. However, it does expect considerable growth in MENA region.
The Washington-based international financial institution increased its economic growth estimation for MENA to over 4.1% this year from the previous projection of 4%. This can be credited to the fast rollouts of vaccines in some parts of the region and financial measures adopted at the beginning of the pandemic. Growth in 2022 is likely to be around 4.1% as compared to the estimated 3.7% in April.
IMF’s director for MENA and Central Asia, Jihad Azour, mentioned that this recovery is still uncertain and that it is important to emphasize that it is uneven, mostly due to the difference in the levels of vaccination. He added that inflation is rising, and this is a problem for some countries.
Azour further mentioned how the present situation could turn out to be a transformational moment for the region as it looks towards a more resilient, inclusive, and greener future.
The impact of the crisis on the region’s corporate sector is uneven. Although the corporate sector has made it through and recuperated to pre-pandemic levels, smaller firms and those in contact intensive sectors still need to catch up.
The IMF has identified a few major risks for the recovery of the region which include increased unemployment levels, the ongoing impact of the pandemic on small companies, and debt stabilization. Moreover, medium-term gross domestic product is anticipated to be around 2.4% lower than pre-pandemic levels.
The organization has urged governments to increase fiscal & monetary support, reduce unemployment and speed up vaccine distribution to maintain the growth momentum.