IMF Lowers Growth Forecast for MENA Region in 2024

The International Monetary Fund (IMF) continued to reduce its growth expectations for the economies of the Middle East and North Africa (MENA) for the current year, by about 10 basis points in its report issued Tuesday, from its estimates last January, to 2.8%, but it kept its expectations unchanged for next year at 4.2%.

This is close to the World Bank's estimate issued yesterday that the region's economies will grow to 2.7% during the current year.

This adjustment in the IMF’s view of the growth of the region’s economies reflects its expectation of a decline in growth in non-oil activities and oil revenues for Iran and a number of smaller economies, according to the Fund’s report.

Regarding the economy of Saudi Arabia, the largest economy in the region, the Fund lowered its outlook for its economic growth during the current year to 2.6% from 2.7% in January’s expectations, but raised it by 50 basis points in 2025 to reach 6%.

Earlier, Kristalina Georgieva, Director General of the International Monetary Fund, urged the countries of the region to strengthen their financial capabilities in the face of current challenges and to withstand shocks that may result from the unusually uncertain conditions that the region is witnessing.

Georgieva warned that these conditions "exacerbate the challenges faced by economies that are still recovering from previous shocks." Further expansion of conflict in the region would exacerbate the economic damage.

As for its outlook on global economic growth, the Fund’s expectations indicated that global growth would continue at the same pace as last year at 3.2% in 2024 and 2025, which represents an increase of 10 basis points for the current year compared to last January’s report.

Georgieva said in a speech she delivered last Thursday in Washington that global growth will be “marginally stronger” in the Fund’s new forecasts, but it is still “well below the historical average,” noting that the global economy still faces the risk of “the tepid twenties.” “This decade, if the challenges of inflation and debt are not addressed.

Strong consumption and investment, as well as easing supply chain issues, are among the drivers of strong growth in the United States and many emerging market economies, she said. But the head of the International Monetary Fund stressed that inflation has not been completely defeated, and that debt levels in most countries are very high.