2023-10-10 10:48:23
The latest report from the International Monetary Fund (IMF), titled “Balancing…jobs and wages in the Middle East and North Africa region in times of crisis,” highlights a bleak economic outlook for the Middle East region. East and North Africa (Mena).
“Balancing…jobs and wages in the Middle East and North Africa region in times of crisis” is the latest report from the International Monetary Fund (IMF). It forecasts that the region’s total gross domestic product growth will be only 1.9% in 2023. This is a sharp decline compared to 2022, when 6% was recorded.
This is mainly due to reduced oil production, due to falling oil prices, as well as pressure from tight global financial conditions and rising inflation.
A real GDP of 1%
This same report specifies: “This economic decline will be particularly pronounced in the Gulf Cooperation Council countries, which are major oil exporters. Indeed, real GDP growth in these countries is expected to be limited to only 1% in 2023, compared to 7.3% in 2022, especially due to the reduction in oil production and the fall in oil prices. oil”.
For oil-exporting developing countries, their growth is forecast to fall from 4.3 percent in 2022 to 2.4 percent in 2023. For oil-importing countries in the region, the report says conditions Tight global financial markets and high inflation are hampering economic activity.
Their growth rate is estimated to reach 3.6% in 2023, down from 4.9% in 2022.
The report highlights the impact on living standards, showing that per capita income growth is expected to fall from 4.3% in 2022, to just 0.4% in 2023, across the region.
By the end of 2023, the level of per capita income relative to total real GDP, as it was before the pandemic, will be restored in only eight of the region’s 15 economies.
Impacts of natural disasters
Although the IMF has not yet fully assessed the economic consequences of the recent natural disasters in Morocco and Libya, it believes that their impact on the overall economy is likely to be modest, as these disruptions are likely to be short-lived.
The report also highlights that labor markets in the region differ from those in emerging and developing economies.
The unemployment rate is twice as sensitive in the region during economic contractions, compared to emerging and developing economies.
According to Roberta Gatti, chief economist for the Middle East and North Africa region at the IMF, “governments find themselves in a delicate situation during an economic downturn, having to choose between increasing unemployment and decreasing wages”.
It is recalled that global economic shocks between 2020 and 2022 had a significant impact on employment in the region, and some findings of the report indicate that these shocks could have led to an increase of 5.1 million additional unemployed, exceeding thus the rates already high before the Covid-19 crisis.
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