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IMF forecasts Mena growth slowdown

Middle East and North Africa region is among most affected by the Russia-Ukraine war

Economic growth prospects have dimmed globally and in the Middle East and North Africa (Mena) region six months since the Washington-based IMF made its previous biannual forecast.

The fund expects real GDP across the Mena region to grow by an estimated 5 per cent in 2022 and 3.6 per cent by 2023, compared with an estimated growth of 5.8 per cent across the region in 2021.

An uneven economic growth is forecast between the region’s fossil fuel exporters and importers in the wake of record-high oil and gas prices and the Russia-Ukraine war.

Saudi Arabia, for instance, is expected to grow by 7.6 per cent, which is up 2.8 percentage points compared to the IMF’s forecast in October.

The 2022 forecast for Saudi Arabia reflects “higher oil production in line with the Opec+ agreement, reinforced by stronger-than-anticipated growth in the non-oil sector”, the IMF said.

The UAE’s real GDP is forecast to grow by 4.2 per cent in 2022, compared to an estimated 2.3 per cent in 2021.

Iraq and Kuwait, the region’s most oil-dependent economies, are expected to register growths of 9.5 and 8.2 per cent this year, up from 5.9 per cent and 1.3 per cent in 2021.

However, the IMF forecasts the reverse for Iran and Algeria, both oil exporters. Real GDP growth is forecast to slow down from 4 per cent in 2021 for both countries to 3 per cent in Iran and 2.4 per cent in Algeria this year.

Similarly, the IMF expects oil importers Morocco and Tunisia’s growth to slow down. Morocco’s real GDP growth is expected to drop from 7.2 per cent to 1.1 per cent, while Tunisia’s will fall from 3.1 per cent to 2.2 per cent.

Egypt and Jordan are expected to resist the downward trend. The bank forecasts Egypt’s economy to grow by 5.9 per cent in 2022 compared to an estimated 3.3 per cent in 2021, while Jordan is expected to grow by 0.4 percentage points in 2022 to 2.4 per cent compared to the previous year. Read more

This package on the regional economy also includes:

> UAE enjoys energy price-led fiscal surplus
> UAE budget heading for bumper surplus
> UAE non-oil sectors post marginal growth
> Fitch revises Saudi outlook to positive
> S&P affirms negative outlook for Kuwait
> IMF agrees $3bn Lebanon funding