© Reuters. FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva attends the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, January 17, 2024. REUTERS/Denis Balibouse/File Photo
By Maha El Dahan and Federico Maccioni
In a recent statement, the International Monetary Fund (IMF) highlighted that Middle Eastern economies are experiencing lower growth rates than initially projected, primarily due to reductions in oil production and the ongoing Israel-Gaza conflict. Despite these challenges, the overall global economic landscape continues to demonstrate resilience.
During her address at the Arab Fiscal Forum in Dubai, IMF managing director Kristalina Georgieva acknowledged the uncertainties faced by the global economy while also cautioning about the potential adverse effects of continuous conflict in Gaza on regional economies.
According to a regional economic report released by the IMF, the GDP growth forecast for the Middle East and North Africa has been revised down to 2.9% for the current year, falling short of earlier estimates made in October. This downward revision can be attributed to temporary oil production cuts and the conflict in Gaza.
While the IMF has recently raised its global economic growth projections, with improved outlooks for the United States and China, Georgieva also highlighted the impact of conflicting situations on neighboring economies. She emphasized the negative repercussions of the Israel-Gaza conflict on tourism revenues for countries in close proximity, as well as the disruptions caused by Red Sea attacks on global freight costs.
Georgieva further noted that these challenges are particularly burdensome for economies still in the process of recovering from past shocks, underscoring the need for strategic economic initiatives in the region.
Amidst these developments, the IMF is set to release a paper which suggests that phasing out energy subsidies in the Middle East could result in significant financial savings, equivalent to the combined economies of Iraq and Libya. Georgieva emphasized the environmental benefits and social welfare advantages of eliminating regressive energy subsidies.
Advanced technology, including Artificial Intelligence, has emerged as a central theme of discussion at the World Governments Summit, attracting the participation of key executives from leading global tech companies.