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WorldMiddle EastThe Monetary Fund: the non-oil sector is the safety valve of the Gulf economies

The Monetary Fund: the non-oil sector is the safety valve of the Gulf economies

In an interview with “Sky News Arabia Economy”, the director of the International Monetary Fund’s Middle East and Central Asia department, Jihad Azour, expected interest rates in the Gulf region to see stability this year with the US Federal Reserve’s intention to end its monetary policy, and he expected Gulf state revenues to continue their gains, supported by high levels of oil prices.

The IMF predicted that the real “non-oil” GDP of the GCC countries would increase by 4.2% in 2023 and 3.9% in 2024.

The International Monetary Fund also expects the current account balance in the GCC countries to reach 8.6% this year and 6.5% next year, while inflation rates are expected to drop to 2, 9% in 2023 and 2.3% in 2024.

During his interview, Azour expected interest rate stability in the Gulf countries this year, but he expected that the borrowing capacity of some Middle Eastern and African countries du Nord will be affected due to high interest rates.

The director of the Middle East and Central Asia department of the International Monetary Fund also expects the non-oil sector to remain strong this year in the Gulf countries, and on the oil side, Azour believes that the production cuts of negatively affect the growth of producing countries this year, but the expected rise in oil prices will positively affect the incomes of these countries

The economies of the Middle East and North Africa

The director of the Middle East and Central Asia department of the International Monetary Fund, Jihad Azour, confirmed during his interview with “Sky News Arabia Economy” that the fight against inflation will remain the main challenge facing the growth of the economies of the region in the current year, in addition to the persistent geopolitical risks that still cloud many countries, due to its direct impact on tourism and food prices.

The International Monetary Fund has estimated real GDP growth in the Middle East and North Africa region at 3.1% in 2023, rising to 3.4% in 2024, while real GDP growth not oil in the Middle East and North Africa region is expected to grow by 3.6% in 2023 and 3.7% in 2024.

Azour said the high interest rate is draining countries that depend on international markets for funding, and the lack of global liquidity has negatively affected some Middle Eastern economies.

The fund revealed that growth in the Middle East and North Africa region, estimated at 5.3% for the year 2022, exceeded the expectations issued by the fund, despite a series of global events surprises, which reflect strong domestic demand amid the recovery in oil production.

The fund pointed to some economic challenges, including the potential instability of the financial sector in advanced economies, the continued deterioration of the global financial situation for a longer period and the return of global price pressures, noting that following With the recent fluctuations in global financial markets, financial markets in the region have moved in line with global trends, with highly indebted countries being the most affected.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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