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Growth in the Middle East and North Africa (MENA) economies is projected to slow to 3.1% this year, from 5.3% last year, according to the IMF.
“Despite the series of global shocks, the MENA region surprised on the upside last year. We estimate that real GDP grew by 5.3%, reflecting strong domestic demand and a rebound in oil production," said Jihad Azour, director of the IMF's Middle East and Central Asia Department, at a briefing at IMF-World Bank Spring Meetings on Thursday.
“However, growth is projected to slow this year to 3.1% due to tight policies to restore macroeconomic stability, agreed OPEC+ production cuts and the fallout from the recent deterioration in global financial conditions,” he said.
Among MENA oil exporters, growth is expected to slow from 5.7% in 2022 to 3.1% this year with the main growth driver shifting from oil to non-hydrocarbon activities in most countries.
In the region’s emerging markets also, growth is set to slow, falling from 5.1% last year to 3.4% this year, while low-income countries will continue to lag growth at 1.3% this year, as they struggle with high commodity prices, macroeconomic instability and country-specific fragilities, Azour said.
He said the OPEC+ production cuts will lower growth for the GCC but will have a positive outcome on the fiscal and external positions as higher oil prices offset the impact of lower growth. However, higher oil prices are likely to increase fiscal and external strains in MENA oil importers.
He said inflation in the region is forecast to remain unchanged at about 15% this year after surging last year, before declining modestly in 2024.
(Reporting by Brinda Darasha; editing by Seban Scaria)