Rabat – Head of the International Monetary Fund (IMF) Kristalina Georgieva, said on Sunday that public debt in the Middle East and North Africa region is a “particular concern,” with several economies in the region facing severely high debt-to-GDP ratios.
An expected decrease in growth and increase in inflation are also expected to worsen the economic conditions in the region, Georgieva added.
Growth is expected to drop from 5.4% in 2022 to 3.2% this year before it starts increasing again in 2024.
“And for the fourth consecutive year, we expect inflation in the region to surpass 10 percent — above the global average,” she added. “For the region’s emerging market and low-income economies, this reflects the lingering effects of higher food prices and, in some cases, exchange rate depreciations.”
The IMF official attributed some of the region’s troubles to the international tensions that have dominated over the past year, especially the Russia-Ukraine war and the effects it has had on international supply chains.
Climate change was also cited as a contributing factor. Morocco, in particular, faced a severe drought in 2022 which impacted the country’s agricultural output.
“Add to this persistently high unemployment, especially among young people, and you have a significant risk to social stability,” she added.
The IMF head praised Morocco’s approach to the rising cost of living, citing it as an example of “careful planning.”
“Morocco is doing it [lowering costs] by phasing out expensive, untargeted subsidies in favor of targeted social support,” she said.
Georgieva has previously said that 2023 would be a tough year economically, with several crises like the COVID-19 aftermath and the war in Ukraine compounding to put the world’s economy in a tough position.
She warned that a third of the world’s economy could stay in a recession for 2023, with global growth projected at 2.7% compared to 3.2% in 2022.
