Economy slows in MENA, Central Asia – IMF

The International Monetary Fund (IMF) has stated that economic growth in the Middle East, North Africa, and Central Asia regions will slow in 2023, highlighting the need to expedite structural reforms. According to the IMF’s Regional Economic Outlook report, real GDP growth in the Middle East and Central Asia is expected to decrease to 2.9% in 2023, from 5.3% in 2022, before improving to 3.5% in 2024. Meanwhile, growth in the Middle East and North Africa region is expected to slow to 3.1% in 2023, from 5.3% in 2022, and to 4.2% in the Caucasus and Central Asian states from 4.8% last year.

IMF regional director Jihad Azour stated that the outlook for the region is uncertain, with a range of risks impacting it. While some risks are global, some are due to the risk of fragmentation, and some are due to certain countries having a high level of debt. The report added that tight monetary and fiscal policies across the region and tight financial conditions highlight the need to speed up structural reforms to improve potential growth and enhance resilience.

The IMF forecast for Egypt is that growth will slow to 3.7% in 2023 from 6.6% in 2022, which led to the country’s $3 billion, 46-month financial support package from the IMF. Azour emphasised that it is vital to maintain discipline on the macroeconomic front and to expedite reforms to improve investors’ confidence and promote growth recovery.

The IMF’s forecast of 2.9% is more cautious than the 4% predicted in a recent Reuters poll. The report’s authors urged policymakers to put in place credible policy frameworks, attract private investment, and promote inclusive growth to mitigate the impact of rising uncertainty.