🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

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

Published 10/31/2024, 02:16 AM
Updated 10/31/2024, 02:21 AM
© Reuters. FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside its headquarters in Washington, U.S., on Sept. 4, 2018. REUTERS/Yuri Gripas/File Photo

By Rachna Uppal

DUBAI (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. 

© Reuters. FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside its headquarters in Washington, U.S., on Sept. 4, 2018. REUTERS/Yuri Gripas/File Photo

"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.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.