IMF: Growth in Middle East and Central Asia will slow

Saudi economy nears reduced dependence on oil

Economic growth in the Middle East, North Africa and Central Asia (MENA) regions will slow in 2023, the International Monetary Fund (IMF) said on Wednesday.

In its Regional Economic Outlook report, the IMF predicted real GDP growth in the Middle East and Central Asia would slow to 2.9 percent in 2023 from 5.3 percent last year before improving to 3.5 percent in 2024.

Growth in the Middle East and North Africa is expected to slow to 3.1 percent in 2023 from 5.3 percent last year, and to 4.2 percent in the Caucasus and Central Asia from 4.8 percent in 2022.

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Monetary and fiscal tightening policies across the region and tight fiscal conditions “call for accelerating the implementation of structural reforms to boost potential growth and increase resistance,” the report said.

Egypt’s economic growth is expected to slow to 3.7 percent in 2023 from 6.6 percent in 2022 amid economic problems that led to a 46-month IMF financial support package being sought.

Jihad Azour


Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said reforms led by the Saudi government and growth in private investment in new sectors would help support expansion in the kingdom’s non-oil economy amid expectations of a sharp slowdown in overall growth this year.

The IMF expects Saudi GDP growth to more than halve to 3.1 percent this year.

“With the implementation of new OPEC+ quotas this year, we expect the oil sector to slow down,” Azour said, adding that the impact on the kingdom’s budget depends on prices.

“Cutting oil production will affect growth because production will fall, but revenues can grow and this could have a positive impact on both the external transactions account, reserves and the budget deficit,” he said.

“It is clear that the strategy over the past five or six years has helped the Saudi economy as well as public finances to be less affected by the movement of oil prices,” he said.

“The size of the non-oil economy is growing and is mainly driven by the private sector,” he said.

On the region, he said that “factors of uncertainty prevail, and there are a number of risks that affect the outlook for the economic performance of the region.”

“Some of these risks are global and some are related to the risk of interest rate differentials between countries, but some are due to the fact that a certain number of countries have high levels of debt,” he said.

And on Egypt, he said: “It is very important for a program to be implemented over four years that links confidence to accelerating the pace of reforms and also maintains discipline on the macroeconomic front to ensure that the Egyptian economy attracts investors and growth recovers on the correct track.”

For more on IMF reports, click here.