Mitigating inflation impact while preserving fiscal sustainability
Source: Middle East Insurance Review | Dec 2022
Countries in MENA have to act now to mitigate the cost-of-living crisis while preserving fiscal sustainability and building resilience, said IMF director of the Middle East and Central Asia department Jihad Azour.
Speaking in Dubai at the launch on 31 October of the IMF’s ‘Regional Economic Outlook for the Middle East and North Africa’, he said, “This is the most pressing policy priority for all countries in the region.”
Economic activity in MENA has been resilient so far, but inflation has surprised on the upside, and the region is facing exceptional uncertainties and downside risks, he said.
Mr Azour said that the region’s multi-speed recovery has continued in 2022, with activity in oil exporting countries still benefiting from high energy prices, while the pace of expansion in emerging market and middle-income economies is slowing as they face a deep terms-of-trade shock, higher sovereign spreads, and eroded access to market financing.
Overall, the region is projected to grow at 5% in 2022, up from 4.1% in 2021. However, worsening global conditions will weigh on the outlook for 2023, with growth slowing to 3.6%. M