👀 Ones to watch: Undervalued stocks to buy before they report Q3 earningsSee Undervalued Stocks

IMF sees high rates, oil prices and inflation worries in Middle East

Published 04/15/2023, 04:50 PM
Updated 04/15/2023, 04:55 PM
© Reuters. FILE PHOTO: A Saudi woman wearing protective gloves shops at a supermarket, following the outbreak of the coronavirus disease (COVID-19), in Riyadh, Saudi Arabia May 11, 2020. REUTERS/Ahmed Yosri

WASHINGTON (Reuters) - Banks in the Middle East and Central Asia have very limited exposure to last month's banking turmoil in the United States and Europe, but financial pressures are adding to strains caused by high interest rates, volatile oil prices and years of double-digit inflation, a top IMF official said on Saturday.

Jihad Azour, director of the International Monetary Fund's Middle East and Central Asia department, said the banking sector strains came on top of tighter monetary policies that raised rates and reduced accessibility to finance.

Azour said there was an increasing gulf between countries that had good credit and were able to access the markets, including Morocco, Jordan and oil exporters, and others who were struggling.

"We are worried because the matrix of risks keeps growing: high interest rates, volatility in oil prices, geopolitical tensions, and it's the third year in the row where you have double-digit inflation," he said.

Stability in the financial sector was not the primary concern, he said, trumped for now by worries about high debt levels, the risk of social unrest and the ability to maintain tight policies because of pressures on the social front.

© Reuters. FILE PHOTO: A Saudi woman wearing protective gloves shops at a supermarket, following the outbreak of the coronavirus disease (COVID-19), in Riyadh, Saudi Arabia May 11, 2020. REUTERS/Ahmed Yosri

"We see vulnerabilities going up again, and this is why countries are encouraged to do more structural reforms, to inch up their growth by at least one or two percent," he said. "And they have a window of opportunity with governments now willing to do more, and not to put money in the central bank coffers."

The IMF on Thursday forecast that GDP growth in the Middle East and North Africa region will slow to 3.1% in 2023, from 5.3% a year ago.

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.