(MENAFN) The head of the International Monetary Fund, Kristalina Georgieva, recently spoke at an Arab Monetary Forum in Dubai, where she addressed the state of public debt in some Middle Eastern and North African countries. During her speech, Georgieva expressed concern over the current levels of public debt in the region and stressed the importance of building resilience through fiscal policies in order to protect against future economic shocks.
Georgieva cited the recent earthquake that devastated large parts of Syria and Turkey as an example of how these types of events can have a significant impact on a country's economy. She emphasized the need to build more resilience to these types of shocks in order to prevent a similar scenario in the future.
The IMF recently released a forecast predicting that economic growth in the Middle Eastern and North African region will slow to 3.2 percent in 2023, before ticking up to 3.5 percent in 2024. Georgieva acknowledged that the global economy remains weak, but said they may be at a turning point. According to the IMF's forecast, global economic growth is expected to slow to 2.9 percent in 2023, before rebounding slightly to 3.1 percent in 2024.
Despite these concerns, Georgieva had some positive news to share as well. She said that inflation is expected to decline from 8.8 percent in 2022 to 6.6 percent in 2023, and further to 4.3 percent in 2024. This, according to Georgieva, is due to a combination of factors such as China's reopening, resilient labor markets, and consumer spending in the US and EU.
However, Georgieva also stated that the balance of risks remains tilted to the downside. She mentioned potential obstacles such as China's recovery stalling, inflation remaining higher than expected, or Russia's conflict in Ukraine escalating, which could further fragment the global economy.
The IMF chief also noted that as the global economy slows, growth in the Middle Eastern and North African region is expected to drop as well. From 5.4 percent in 2022, growth is expected to slow to 3.2 percent in 2023 before ticking up to 3.5 percent in 2024. Georgieva explained that the OPEC+ production cuts would reduce overall revenue for oil exporters in the region, while challenges for oil importers will continue.
Finally, Georgieva expressed concern over public debt levels in the region, pointing out that several economies are facing elevated debt-to-GDP ratios, with some close to 90 percent. She stressed that this is a particular concern and governments need to take action to address the issue.
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