Global financial institution optimistic on economic growth prospects in Middle East and North Africa region
The Middle East and North Africa are on track for recovery, but rising social unrest and increasing inequities threaten the "fragile" progress of low-income economies, the IMF said on Tuesday.
The MENA region, which includes Arab countries and Iran, saw real GDP growth shrink by 3.2 percent in 2020 due to weak oil prices and sweeping lockdowns to halt the spread of the coronavirus.
But with rapid vaccination campaigns, especially in oil-rich Gulf nations, the International Monetary Fund predicted gross domestic product growth would rise to 4.1 percent this year, up 0.1 of a percentage point from its 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," said Jihad Azour, director for the Middle East and Central Asia at the IMF, adding recovery is not the same in all countries.
"It is uncertain and uneven because of the divergence in vaccination, recent developments, increase in prices ... but also the uncertainty about the global financial conditions and the risk of change in interest rate conditions, (and) geopolitical developments," he told AFP.
In a report, the IMF said that while the prospects for oil-exporting economies improved with higher oil prices, low-income and crisis-hit countries were 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."
Algeria, Iraq, Lebanon, Sudan and other countries have witnessed protests by thousands of angry citizens demanding reforms, better jobs and services.
Unemployment increased in MENA last year by 1.4 percent to reach 11.6 percent, a rise exceeding that seen during the 2008-2009 global financial crisis and 2014-15 oil price shock, the IMF said.