IMF Managing Director Kristalina Georgieva, addressing an Arab Fiscal Forum in Dubai, said global growth remains weak, but it may be at a turning point.
"After expanding by 3.4% last year, we see growth slowing to 2.9% in 2023 and rebounding slightly to 3.1% in 2024," she stressed.
The IMF forecast last month that economic growth in the MENA region will slow to 3.2% this year, before ticking up to 3.5% in 2024.
On the positive, she said in her speech that they see inflation declining from 8.8% in 2022 to 6.6% this year and 4.3% in 2024 - although for most countries, it will still be above pre-pandemic levels. "China’s reopening is helping, as well as resilient labor markets and consumer spending in the US and the EU."
While this is encouraging, Georgieva said the balance of risks remains tilted to the downside. "China’s recovery could stall. Inflation could remain higher than expected, requiring even more monetary tightening - which could cause a sudden repricing in financial markets," the IMF chief said, adding that the crisis in Ukraine could escalate, causing further fragmentation of the global economy.
As the global economy slows, she said growth is also expected to drop in the MENA region - from 5.4% in 2022 to 3.2% this year before ticking up to 3.5% in 2024. The IMF chief said the OPEC+ production cuts would reduce overall revenue for the oil exporters.
"For oil importers, the challenges would continue. Public debt is a particular concern, with several economies in the region facing elevated debt-to-GDP ratios - some close to 90%," Kristalina Georgieva added in her speech.
