IMF sees economic growth in the Mideast improving next year. But the Israel-Hamas war poses risks
The International Monetary Fund says Middle East economies are gradually recovering as external shocks from the war in Ukraine and global inflation fade
DUBAI, United Arab Emirates — Middle East economies are gradually recovering as external shocks from the war in Ukraine and global inflation fade, the International Monetary Fund said Thursday, but the escalating war between Israel and the Hamas militant group could dampen the outlook.
IMF Managing Director Kristalina Georgieva said the organization was closely monitoring the economic impact of the war, especially on oil markets, where prices have fluctuated.
“Very clearly this is a new cloud on not the sunniest horizon for the world economy — a new cloud darkening this horizon that is not needed,” she said at a news conference during the IMF and World Bank's annual meetings in Marrakech, Morocco.
The IMF expects economic growth to slow to 2% this year in the Middle East and North Africa, from 5.6% last year, as countries keep interest rates higher and contend with rising oil prices and local challenges. Growth is expected to improve to 3.4% in 2024.
That's below the IMF's forecast for global economic growth of 3% this year but above next year's expected 2.9%.
Wealthy countries in the Persian Gulf and elsewhere will benefit from higher oil prices, while Egypt and Lebanon are still contending with soaring inflation, the IMF said.
Climate change poses a challenge across the region, as seen in last month's devastating floods in war-torn Libya.
Average inflation is expected to peak at 17.5% this year before easing to 15% in 2024. Both figures drop by about a third with the exclusion of Egypt, where inflation soared to nearly 40% last month, and Sudan, where rival generals
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