IMF projects 4% growth rebound in Middle East and North Africa next year

Meren Energy

31/10/2024 06:00

By Rachna  Uppal
       DUBAI, Oct 31 (Reuters) - Growth in the Middle East and
North Africa region is expected to rebound to 4% next year, but
will hinge on a phase out of oil production cuts and headwinds
subsiding, including from conflicts, the International Monetary
Fund said on Thursday. 
    Growth in the region will remain "sluggish" at 2.1% in 2024,
according to the IMF's latest Regional Economic Outlook,
launched in Dubai, lower than earlier projections as
geopolitical and macroeconomic factors weigh.
    The IMF cautioned that risks to the outlook for the whole
region, including the Caucasus and Central Asia, "remain tilted
to the downside," and called for an acceleration of structural
reforms, including in governance and labour markets, to lift
prospects for medium term growth.
    For 2024, the MENA growth estimate has been revised
downwards by 0.6% from April's report, mainly due to the
extension of the Israel-Hamas conflict and further extensions of
OPEC+ voluntary oil production cuts, Jihad Azour, the IMF's
director for the Middle East and Central Asia department, said
in an interview.
    He added that the "good news" was that inflation was
gradually being brought under control across the region, and
expected to average the 3% target rate in 2024, with the
exception of Egypt, Iran and Sudan.
    However, the outlook varies considerably across the region,
with oil exporting countries expected to cope better with
potential risks, supported by "strong" non-oil sector growth,
Azour said.
    Amid lower oil prices and lower oil production this year,
non-oil growth in the Gulf Cooperation Council (GCC) region, has
mostly outperformed overall growth as government led investment
programmes help drive domestic demand. Saudi Arabia, Kuwait, the
United Arab Emirates, Qatar, Bahrain and Oman are part of the
GCC. 
    Middle East and North Africa oil importers remain more
vulnerable to ongoing conflicts and high financing needs. 
    "Even as these issues gradually abate, uncertainty remains
high and structural gaps will likely hold back productivity
growth in many economies over the forecast horizon," the IMF
report said.
    The IMF has approved $13.4 billion in new funding to Middle
East and Central Asian countries since January 2024, including
for programmes in Egypt, Jordan and Pakistan.

 (Reporting by Rachna Uppal; Editing by Jacqueline Wong)
 ((mailto:rachna.uppal@thomsonreuters.com;))