The International Monetary Fund has revised its growth forecast for the Middle East and North Africa upwards as countries recover from the coronavirus crisis that began in 2020.
Real GDP in the MENA region is expected to grow by 4% in 2021, compared to the fund’s forecast of 3.2% in October.
However, the outlook will vary significantly from country to country depending on factors such as the introduction of vaccines, exposure to tourism and policies put in place, the IMF said in its latest regional economic report published on Sunday.
(The) vaccine is an important variable this year, and the acceleration of vaccination could contribute to nearly an additional percent of GDP by 2022.
Jihad Azour
IMF Director Middle East and Central Asia
Jihad Azour, director of the IMF’s Middle East and Central Asia division, said the recovery “varies between countries and unevenly between different segments of the population.”
He told CNBC’s Hadley Gamble that the growth would mainly be driven by oil-exporting nations that will benefit from the accelerated vaccination programs and relatively strong oil prices.
Vaccines an ‘important variable’
Azour said each country’s resilience varies “greatly” by 2021.
“(The) vaccine is an important variable this year, and the acceleration of vaccination could contribute to nearly an additional percent of GDP by 2022,” he said.
Some countries in the region – such as the Gulf Cooperation Council states, Kazakhstan and Morocco – have started vaccinations early and should be able to inoculate a significant portion of their populations by the end of 2021, the IMF said.
Other countries, including Afghanistan, Egypt, Iran, Iraq and Lebanon, have been classified as “slow inoculators” likely to vaccinate a large portion of their residents by mid-2022.
Shoppers wearing protective masks will walk near the Dubai Mall and Burj Khalifa skyscraper in Dubai, UAE on Wednesday, January 27, 2021.
Christopher Pike | Bloomberg | Getty images
The latter group – the “late inoculators” – are not expected to reach full vaccination until 2023 at the earliest, the report said.
It added that early inoculators are expected to reach 2019 GDP levels in 2022, but countries in the two slower categories will recover to pre-pandemic levels between 2022 and 2023.
Looking forward
Azour said that while innovative policies have helped accelerate the recovery, it is “very important to build better forward.”
This could include measures to improve the economy, attract investment, strengthen regional cooperation and tackle the scars of the Covid crisis.
“All of these elements are silver liners that can help accelerate the recovery and bring the region’s economy to the level of growth that existed before the Covid-19 shock,” he said.