| 1 December 2023, Friday |

IMF warns: MENA region faces 4 challenges

Growth of the real GDP in the Middle East and North Africa (MENA) region is projected to slow this year to 3.1 percent from 5.3 percent in the previous year, announced Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour.


Azour added that inflation is forecast to remain unchanged at around 15 percent this year before declining modestly in 2024.


In a videoconference attended by Asharq Al-Awsat, Azour explained that the MENA countries face four challenges this year, which are dealing with the effects of inflation, global uncertainty, international financing difficulties, and economic reform developments.


Azour explained that dealing with inflation may require increasing interest rates, which affects economic growth. At the same time, uncertainty and geopolitical tensions pervade all global horizons, and their consequences fall on everyone’s shoulders.


Concerning oil-importing countries, the rise in energy prices increases the risks, especially with the increase in the cost of financing and the difficulty in obtaining it. As for the oil-exporting countries, the most critical challenge is growing and diversifying revenues.


Meanwhile, Italian Foreign Minister Antonio Taiani said Thursday that his country wants the IMF to start disbursing a loan to Tunisia without conditions.


During a press conference with his Tunisian counterpart, Tajani vowed to work on Tunisia’s behalf in negotiations with the IMF, repeating Italy’s proposal that the loan be delivered in two tranches and not be fully dependent on all reforms being in place.


“But not utterly conditional on… the conclusion of the reform process. Start financing, encourage the reforms,” he told reporters.


Last week, President Kais Saied rejected IMF “diktats”, which asked Tunisia to carry out economic reforms and subsidy cuts as terms for the stalled bailout.


Saeed said he would “not hear diktats” from abroad, warning that the subsidies could lead to unrest.


European leaders feared the collapse of the Tunisian economy could increase the influx of immigrants to European shores.


Tunisia’s debts amount to about 80 percent of its gross domestic product, and it reached a preliminary agreement with the Fund in mid-October for a new $1.9 billion loan to help overcome the financial crisis.


However, talks reached a dead end after Tunisia failed to implement a reform program to restructure more than 100 indebted state-owned companies and lift subsidies on some essential goods and services.

  • Asharq Al-Awsat