Accelerating structural reforms to bolster growth and enhance economic resilience are necessary as governments in the Middle East and Central Asia tighten monetary policy amid uncertain global financial conditions, the International Monetary Fund has said.
The regional economies proved resilient in 2022, despite a series of global shocks, and surprised on the upside, however growth this year and potentially the next is expected to slow amid growing global macroeconomic headwinds, the IMF said in its latest Regional Economic Outlook on the Middle East and Central Asia.
“Amid continued uncertainty, policymakers should stay the course to safeguard macroeconomic stability through tight monetary and fiscal policies while being mindful of financial stability risks,” IMF economists said in the report on Wednesday.
“At the same time, they should accelerate structural reforms to bolster potential growth and enhance resilience, inclusion and social safety nets.”
In the Middle East and North Africa, real gross domestic product grew by 5.3 per cent in 2022, reflecting strong domestic demand and a rebound in oil production. However, growth is projected to decelerate this year to 3.1 per cent before picking up slightly to 3.4 per cent next year.
The slower economic growth reflects tighter policies to fight inflation, reduce vulnerabilities and efforts to rebuild financial buffers.
“For oil exporters [in the Mena region], we project growth to slow to 3.1 per cent in 2023, down from 5.7 per cent in 2022, with the main driver of growth shifting from oil to non-hydrocarbon activities in most countries,” said Jihad Azour, director of the IMF's Middle East and Central Asia Department.
The IMF’s growth projection for Mena's oil-exporting nations reflects developments prior to the production cuts outlined in the latest Opec+ agreement, Mr Azour said.
On April 2, Opec+ members announced voluntary crude output cuts of 1.16 million barrels per day, effective from May 1 until the end of December. These cuts are aimed at supporting the stability of the oil market, the producers said at the time.
“These cuts will lower growth for oil exporters but are expected to positively affect their fiscal and external positions as higher oil prices would more than offset the impact of lower growth,” Mr Azour said.
“However, higher oil prices are likely to increase fiscal and external strains on Mena oil importers and add to inflationary pressures.”
The outlook for the Caucasus and Central Asia region, which grew 4.8 per cent in 2022, depends heavily on external factors, including the impact of monetary tightening and the growth of their main trading partners, the IMF said.
The Washington-based fund expects growth in the region to slow to 4.2 per cent this year, as the impact of the initial spillover from the war in Ukraine fades, before rebounding slightly in 2024.
In April, the IMF said the global economy is facing a “rocky” recovery as geopolitics, monetary tightening and inflation continue to weigh on growth.
While the reopening of China, the world's second-largest economy, is supporting global growth and the recovery from the Ukraine war and the Covid-19 pandemic is on track, the rebound across countries is fragmented, the lender said in its World Economic Outlook.
The fund lowered its global economic growth estimate for this year by 0.1 percentage points to 2.8 per cent, down from the 3.4 per cent expansion in 2022 and the historical growth average of 3.8 per cent over the 2000-2019 period.
Inflation globally is beginning to decline and expected to drop to 7 per cent this year and 4.9 per cent in 2024, from 8.7 per cent in 2022.
It is expected to remain persistent in the wider Mena region at about 15 per cent this year, broadly in line with 2022 levels, Mr Azour said.
With projected high debt levels and gross public and external financing needs, “fiscal and external vulnerabilities are expected to remain elevated in the region’s emerging markets” this year, he added.
However, the recent financial stress on advanced economies amid a series of bank failures in the US as well as the forced merger of Credit Suisse with UBS has had “limited spillovers to the region’s banks”.
There is “no direct exposure of the region to Silicon Valley Bank [in the US] and [they have] a limited exposure to Credit Suisse”, Mr Azour said.
Despite stability, the risks to Mena economies’ baseline are high, including further financial sector instability in advanced economies that could lead to contagion, more adverse credit conditions and exacerbating financial market volatility, he said.
It could also trigger debt sustainability concerns for many emerging markets in the region.
“Tighter-for-longer global financial conditions could also prompt investors to reassess debt sustainability, pushing the most vulnerable economies to the brink of debt distress,” Mr Azour said.
Any escalation in the war in Ukraine could also trigger volatility in commodity markets that could fuel additional inflationary pressures across the Mena region, he added.
Given the growing uncertainty, “striking the right policy balance will be critical” for regional decision makers, whose monetary policies should focus on maintaining price stability.
Although the region’s central banks tightened monetary policy early on compared to advanced economies to curb inflation and there was “significant heterogeneity”, a few countries still need to tighten further, Mr Azour said.
“In several countries, monetary policy implementation is undermined by a lack of co-ordination with fiscal policy or fiscal dominance,” he said.
The IMF, which is a lender of last resort for vulnerable and struggling economies, remains committed to the Mena region.
In addition to tailored policy advice, the IMF has assisted member countries through its lending arrangements.
Since the end of March, the fund has approved $25 billion in new financing for Mena countries, which includes its financial assistance deals for Egypt, Mauritania and Morocco, Mr Azour said.
Sunday:
GP3 race: 12:10pm
Formula 2 race: 1:35pm
Formula 1 race: 5:10pm
Performance: Guns N' Roses
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
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Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Jetour T1 specs
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How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
The years Ramadan fell in May
List of alleged parties
- May 15 2020: Boris Johnson is said to have attended a Downing Street pizza party
- 27 Nov 2020: PM gives speech at leaving do for his staff
- Dec 10 2020: Staff party held by then-education secretary Gavin Williamson
- Dec 13 2020: Mr Johnson and his then-fiancee Carrie Symonds throw a flat party
- Dec 14 2020: Shaun Bailey holds staff party at Conservative Party headquarters
- Dec 15 2020: PM takes part in a staff quiz
- Dec 18 2020: Downing Street Christmas party
The biog
Name: Dhabia Khalifa AlQubaisi
Age: 23
How she spends spare time: Playing with cats at the clinic and feeding them
Inspiration: My father. He’s a hard working man who has been through a lot to provide us with everything we need
Favourite book: Attitude, emotions and the psychology of cats by Dr Nicholes Dodman
Favourit film: 101 Dalmatians - it remind me of my childhood and began my love of dogs
Word of advice: By being patient, good things will come and by staying positive you’ll have the will to continue to love what you're doing
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Teaching your child to save
Pre-school (three - five years)
You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.
Early childhood (six - eight years)
Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.
Middle childhood (nine - 11 years)
Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.
Young teens (12 - 14 years)
Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.
Teenage (15 - 18 years)
Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.
Young adulthood (19 - 22 years)
Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.
* JP Morgan Private Bank
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
RESULT
Deportivo La Coruna 2 Barcelona 4
Deportivo: Perez (39'), Colak (63')
Barcelona: Coutinho (6'), Messi (37', 81', 84')
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
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