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OIC Economies

Middle East economy to grow by 4.1% in 2021: IMF

Published 19 Oct,2021 via Muscat Daily–The Middle East and North Africa is on track to economic recovery, but rising social unrest and unemployment are threatening to hinder ‘progress’, the International Monetary Fund said on Tuesday.

The MENA region, which includes the Arab countries and Iran, saw its real GDP growth shrink by 3.1 per cent in 2020 due to lower oil prices and sweeping lockdowns to prevent the spread of the coronavirus.

But with rapid vaccination campaigns, particularly in the Gulf nations, the IMF predicted that GDP growth would rise to 4.1 per cent this year, a slight upgrade of 0.1 per cent from the last projection in April.

“The region is going through recovery in 2021. Since the beginning of the year, we see progress in the economic performance,” Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told AFP in an interview.

But ‘this recovery is not the same in all countries. It is uncertain and uneven because of the divergence in vaccination… and geopolitical developments’, Azour added.

The IMF said this month that while prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries are witnessing ‘fragile’ recoveries.

It warned of ‘a rise in social unrest’ in 2021 that ‘could pick up further due to repeated infection waves, dire economic conditions, high unemployment and food prices’.

Unemployment rates increased in MENA last year by 1.4 per cent to reach 11.6 per cent. This rise exceeds that seen during the global financial crisis and the 2014-15 oil price shock.

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