Arab economies to achieve 3.4 percent growth in 2023

Arab governments targeting 4 percent growth in 2024
Arab economies to achieve 3.4 percent growth in 2023
Dr. Abdul Rahman bin Abdullah Al Humaidi (Photo Credit: WAM)

Dr. Abdul Rahman bin Abdullah Al Humaidi, the Director-General and Chairman of the Board of the Arab Monetary Fund (AMF), revealed that the AMF’s projections anticipate a growth rate of around 3.4 percent for Arab economies in 2023. It is further expected that this figure will rise to 4 percent in 2024.

Al Humaidi emphasized the significance of Arab governments expediting their efforts towards digital transformation. He also highlighted the importance of transitioning to knowledge-based economies.

Al Humaidi made his remarks at The Arab Banking Conference 2023 was inaugurated in Riyadh. The event was held under the theme “Arab Economic Outlook in Light of International Changes.”

He pointed out that Arab countries that swiftly rebounded from the impact of COVID-19 were those with advanced levels of digital readiness.

Read more: ESCWA: Arab economies can strengthen roots, spread their wings

He further emphasized the significance of intensifying endeavors to advance the financial and banking sector within Arab countries. This includes expanding access to financing and financial services. It also involves improving domestic capital markets. Additionally, fostering regional financial integration is another important aspect.

Notable enhancement

The Arab banking system has significantly enhanced its ability to absorb and withstand financial and economic shocks and risks. This progress can be attributed to several factors. These include improved liquidity and solvency levels. Another factor is adherence to Basel III capital and liquidity requirements. Additionally, compliance with the International Financial Reporting Standard (IFRS) 9 has played a significant role in this progress. Additionally, there has been notable enhancement in banking supervision capacities to align with the finest international standards and practices, as highlighted by Al Humaidi.

Economic liquidity

Al Humaidi confirmed that the banking sector serves as the main source of economic liquidity in Arab countries, boasting assets amounting to approximately $4.1 trillion. This figure is equivalent to 124 percent of the combined Gross Domestic Product (GDP) of Arab nations.

Stability and resilience

Furthermore, Al Humaidi stated that the banking sector has demonstrated overall stability and resilience, thanks to its strong levels of capital, asset quality, and profitability. This highlights the role of Arab central banks in upholding financial stability. He further highlighted the Arab banking sector’s notable solvency, with an average capital adequacy ratio of 17.4 percent as of the end of 2022.

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