The International Monetary Fund (IMF) has increased its global growth forecast for the year on the back of strong US consumer spending and China’s reopening after the Zero Covid policy. However, growth is expected to drop in the Middle East and North Africa (Mena) region, from 5.4 per cent in 2022 to 3.2 per cent this year before ticking up to 3.5 per cent in 2024, said the IMF chief.
The IMF has predicted that inflation in the Middle East and North Africa (MENA) will continue to be above 10% for the fourth year in a row in 2023, due to higher food costs and currency devaluations. It is estimated that inflation in the region will exceed ten percent for the fourth consecutive year, which is higher than the global average, while the GCC countries will continue to keep inflation in check.
The IMF also raised its global economic growth outlook for the first time in a year, with resilient US spending and China’s reopening buttressing demand against a litany of risks. The IMF MD stated that, in light of the Covid pandemic, Russia's invasion of Ukraine, and the recent earthquake between Syria and Turkey, we must contemplate the inconceivable as we inhabit a more vulnerable world.
It is anticipated that the global GDP will increase by an estimated 2.9% in 2023, which is 0.2 percentage points higher than the prediction made in October. Governments in the region have identified multi-year financing needs of over $750 billion (Dh2.752 trillion) for climate action, and need to encourage private climate finance through the right policies and financial solutions, she added.
“We all have to change our mindset to be much more agile and much more oriented towards building resilience at all levels, so we can handle the shocks better,” Georgieva said. In recent years, a number of nations in the region, including the UAE, have imposed taxes in order to diversify their income sources away from petrodollars and make their economies more sustainable.
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