- Growth in the MENA region was resilient in 2022. GDP grew by 5.3 per cent, reflecting strong domestic demand and a rebound in oil production.
- Growth is projected to slow to 3.1 per cent in 2023 due to tight policies to safeguard macroeconomic stability and agreed OPEC+ oil production cuts.
- For oil exporters, non-oil GDP is expected to expand at 3.7 per cent as the positive momentum in retail and service sectors is sustained.
- Restoring price stability and preserving debt sustainability are key policy priorities.
- The 2023 World Bank-IMF Annual Meetings in Marrakech will provide a platform for wide-ranging policy discussions on challenges facing the region and the world.
Dubai, UAE: The International Monetary Fund (IMF) today hosted a hybrid event to launch the May 2023 Regional Economic Outlook (REO) for the Middle East and Central Asia region at the Dubai International Financial Centre.
The IMF finds that despite global shocks, growth in the Middle East and North Africa (MENA) region was higher than expected last year. The IMF estimates that real GDP grew by 5.3 per cent, reflecting strong domestic demand and a rebound in oil production. However, growth is projected to slow to 3.1 per cent in 2023 due to tight policies to restore macroeconomic stability, agreed OPEC+ oil production cuts, and the fallout from the recent deterioration in global financial conditions.
For oil exporters, non-oil GDP is forecast to expand by 3.7 per cent in 2023, broadly unchanged from 2022, as the positive momentum in the retail and service sectors in the UAE, Kuwait, and Saudi Arabia is sustained due to abundant liquidity, continued reform momentum, and rapid acceleration of private investment.
After surging last year, inflation is forecast to remain elevated at 14.8 per cent this year before declining modestly in 2024.
Risks remain tilted to the downside and include potential further financial sector instability in advanced economies, tighter-for-longer global financial conditions, and a resurgence of global price pressures. In the wake of recent global financial market instability, the region’s financial markets have moved in line with global trends, though countries with large debt burdens have seen a greater impact.
Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, said: “Amid continued uncertainty, policy tradeoffs remain complex, and striking the right policy balance will be critical. Monetary policy should focus on maintaining or regaining price stability while being mindful of financial stability risks. Fiscal policy should preserve debt sustainability and build buffers while providing targeted and temporary support to protect the vulnerable. Meanwhile, structural reforms should be accelerated to bolster potential growth and enhance resilience, inclusion, and social safety nets.
“Since March 2020, the IMF has supported MENA countries with USD25 bn in new financing, including recent Fund arrangements for Egypt, Mauritania, and Morocco—and allocated USD42 bn special drawing rights to boost the region’s reserve assets. The Fund has also increased its presence on the ground by reopening our regional technical assistance office (METAC) and setting up a new regional office in Riyadh, which will strengthen our partnership with the region. The upcoming World Bank-IMF Bank Annual Meetings in Marrakech in October will provide a platform for wide-ranging policy discussions on challenges facing the region and the world.”
The IMF Regional Economic Outlook report details trends and developments across the Middle East and Central Asia. The report’s findings and indicators are widely used as a benchmark for future economic projections and set the tone for growth, trade, and investment.
About Dubai International Financial Centre:
Dubai International Financial Centre (DIFC) is one of the world’s most advanced financial centres, and the leading financial hub for the Middle East, Africa and South Asia (MEASA), which comprises 72 countries with an approximate population of 3 billion and an estimated GDP of USD 8 trillion.
With a close to 20-year track record of facilitating trade and investment flows across the MEASA region, the Centre connects these fast-growing markets with the economies of Asia, Europe and the Americas through Dubai.
DIFC is home to an internationally recognised, independent regulator and a proven judicial system with an English common law framework, as well as the region’s largest financial ecosystem of over 36,000 professionals working across over 4,300 active registered companies – making up the largest and most diverse pool of industry talent in the region.
The Centre’s vision is to drive the future of finance through cutting-edge technology, innovation, and partnerships. Today, it is the global future of finance and innovation hub offering one of the region’s most comprehensive FinTech and venture capital environments, including cost-effective licensing solutions, fit-for-purpose regulation, innovative accelerator programmes, and funding for growth-stage start-ups.
Comprising a variety of world-renowned retail and dining venues, a dynamic art and culture scene, residential apartments, hotels and public spaces, DIFC continues to be one of Dubai’s most sought-after business and lifestyle destinations.
