Global economic growth may be reaching a “turning point”, supported by falling inflation and China’s reopening, International Monetary Fund managing director Kristalina Georgieva said on Sunday.
“While this is encouraging, the balance of risks remains tilted to the downside. China’s recovery could stall [and] inflation could remain higher than expected,” said Ms Georgieva, who was speaking at the seventh Arab Fiscal Forum in Dubai.
“Russia’s war in Ukraine could escalate, causing further fragmentation of the global economy.”
Watch: Ukraine's Zelenskyy lands in Belgium ahead of EU summit meeting
Last month, the fund raised its global economic growth estimate for this year to 2.9 per cent from a previous forecast of 2.7 per cent.
The IMF expects global inflation to decline to 6.6 per cent in 2023 from 8.8 per cent last year. It is expected to fall further to 4.3 per cent next year.
“China’s reopening is helping, as well as resilient labour markets and consumer spending in the US and the EU,” said Ms Georgieva.
The Middle East and North Africa region is forecast to grow by 3.2 per cent this year, following a 5.4 per cent expansion in 2022, as the Opec+ group of countries sticks to an oil output cut of 2 million barrels per day.
Opec+ announced a reduction of its collective output in October last year amid growing signs of an economic slowdown and Covid-19 curbs in China, the world’s second-largest economy and top crude importer.
Brent, the benchmark for two thirds of the world’s oil, surged to $90 a barrel last month after China reopened its borders after nearly three years of adhering to a strict zero-Covid policy. The global benchmark has since given up some gains and was last trading at $86.39 on Friday.
“For oil importers, the challenges would continue. Public debt is a particular concern, with several economies in the region facing elevated debt-to-GDP ratios — some close to 90 per cent,” Ms Georgieva said.
Inflation in the Mena region is expected to surpass 10 per cent for the fourth consecutive year in 2023 on higher food prices and currency depreciations, the IMF said.
“We expect inflation to gradually decline as commodity prices settle and tighter monetary and fiscal policies have their intended effect. For the Gulf Co-operation Council countries, we expect inflation to remain contained,” Ms Georgieva said.
However, the war in Ukraine and climate disasters could worsen food shortages for the “most vulnerable”, she added.
“Tighter global or domestic financial conditions could lead to high borrowing costs and, in some cases, a financing crunch,” she said.
“Domestically, delays in much-needed reforms could weigh on regional prospects and government finances.”
Last week, Moody's Investors Service downgraded Egypt's credit rating to B3 from B2 owing to the country's reduced external buffers and shock absorption capacity as it pursues economic reforms in line with its IMF programme.
In 2022, Egypt, the Arab World’s third-largest economy, agreed to a $3 billion rescue plan with the fund that is contingent on the country introducing a flexible foreign exchange regime and reducing the state's footprint in the economy to allow more room for the private sector.
Inflation in the country soared in 2022, exacerbated by the fallout from the war in Ukraine, prompting the Central Bank of Egypt to raise interest by 800 basis points.
Meanwhile, Lebanon, which is in the grip of its worst economic crisis in decades, continues to suffer from hyperinflation, which hit 122 per cent in December, compared with the same period a year earlier.
“Several Arab countries are adopting credible medium-term fiscal frameworks. These are key to mitigating risks when they materialise, while enabling governments to maintain essential spending, stabilise debt, and build investor trust,” Ms Georgieva said.
More from Neighbourhood Watch
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
The years Ramadan fell in May
Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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