The UAE Ministry of Finance (MoF) has announced that the UAE has entered into two agreements with the International Monetary Fund (IMF) aimed at financing the Poverty Reduction and Growth Trust (PRGT) and the Resilience and Sustainability Trust (RST). These agreements were signed during the annual meetings of the World Bank Group (WBG) and the IMF in Washington, D.C., where the UAE delegation will remain until October 26.
Key delegation members
Leading the UAE delegation is Mohamed Hadi Al Hussaini, UAE minister of State for Financial Affairs. The team includes high-ranking officials from the Central Bank of the UAE (CBUAE) and the Ministry of Finance, such as Ibrahim Al Zaabi, assistant governor for Monetary Policy and Stability at CBUAE, and Ahmed Al Qamzi, assistant governor for Banking and Insurance Supervision at CBUAE. Also present are Ali Abdullah Sharafi, acting assistant under-secretary for International Financial Relations at the MoF; Hamad Essa Al Zaabi, director of the Office of the Minister of State for Financial Affairs; and Thuraya Hamed Al Hashemi, acting director of Relations and International Financial Organizations at the MoF, along with various specialists.
Strengthening international collaboration
Al Hussaini remarked that the UAE’s participation in the WBG and IMF annual meetings had gathered leaders in global economic and financial sectors and provided a crucial platform for exchanging ideas and strategies to address urgent economic challenges worldwide. He expressed pride in announcing the signing of two agreements with the IMF to bolster the RST and the PRGT, underscoring the UAE’s dedication to supporting international efforts focused on sustainable development, poverty alleviation, and enhancing the resilience of developing economies amid global challenges, which further reinforces the UAE’s pivotal role in promoting global financial and economic stability.
Moreover, Al Hussaini added that the UAE’s backing for these funds was rooted in a strong belief in the potential of international cooperation to foster a more sustainable and prosperous future, particularly for developing and emerging economies. Through this initiative, they aim to empower low- and middle-income nations to invest in green infrastructure and increase their resilience to economic and climate-related challenges.
Investing in sustainable development
Additionally, Al Hussaini asserted that financial and economic stability is fundamental to sustainable development, and by supporting low-income countries, they are investing in humanity’s future. He expressed confidence that this collaboration with the IMF would significantly contribute to advancing global sustainable development goals while reinforcing the UAE’s status as a key player in shaping the global economic landscape.
Read more: UAE’s real GDP expected to expand by 5.1 percent in 2025, according to IMF
Financial contributions to global trusts
During the October 2023 meeting of the International Monetary and Financial Committee (IMFC) in Marrakech, Morocco, as part of the IMF and WBG meetings, the UAE announced a substantial initiative to co-finance the PRGT with a commitment of $200 million (AED735 million). This pledge, WAM reported, forms part of the UAE’s strategy to enhance concessional lending to low-income nations, aligning with the first goal of the United Nations Sustainable Development Goals (SDGs), which aims to eradicate poverty and address various global challenges for a better and more sustainable future.
Commitment at COP28
Furthermore, at the COP28 conference, scheduled in the UAE from November 30 to December 12, 2023, the UAE committed an additional $200 million (AED735 million) to the IMF’s RST. This funding is designed to boost climate resilience and prepare low-income countries to tackle the effects of climate change.
Role of PRGT and RSTF
Established in January 2010, the PRGT serves as a vital tool for the IMF, targeting the challenges faced by low-income nations. It offers concessional financing to countries dealing with high inflation, persistent food insecurity, rising debt risks, and elevated borrowing costs. In response to these challenges, the IMF has increased interest-free lending through the PRGT to support the poorest and most vulnerable member countries in navigating difficult economic conditions, with 69 countries currently eligible for PRGT financing.
The IMF’s RSTF provides concessional financing with long-term maturities to enhance climate resilience and pandemic preparedness, particularly in middle- and low-income countries most susceptible to the impacts of climate change.
Economic projections for UAE and region
Earlier this week, the IMF projected the UAE’s real GDP to hold steady at 4 percent in 2024 and increase to 5.1 percent in 2025.
Released during the 2024 IMF/World Bank Group Annual Meetings, the IMF World Economic Outlook (WEO) forecasts that economies in the Middle East and Central Asia will grow by 2.4 percent in 2024 and 3.9 percent in 2025.
The report also estimates that advanced economies will grow by 1.8 percent in both 2024 and 2025, up from 1.7 percent in 2023, while emerging market and developing economies are expected to see growth of 4.2 percent in both 2024 and 2025, compared to 4.4 percent in 2023.
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