IMF calls for ‘urgent action’ in virus-hit MENA region

Dubai, UAE – The International Monetary Fund on Monday urged Middle East and North African countries to accelerate reforms and diversification efforts as the energy-rich region faces unprecedented challenges due to the coronavirus and low oil prices.

In its latest regional economic outlook report, the International Monetary Fund projected the economies of the MENA region to shrink by 5 per cent this year compared with a July estimate that they would contract by 5.7 per cent.

The region – which includes all Arab countries and Iran – was expected to suffer its worst economic performance since 1978 when it was convulsed with unrest and shrank by 4.7 per cent, according to the World Bank data.

"We should look at what is happening today as a call for action, and also as an opportunity to stimulate the transformation of the economy and create more opportunities, especially for the youth," Jihad Azour, the IMF's Middle East and Central Asia director, told AFP.

"We expect that both growth and unemployment to be affected this year, and overall this crisis could bring growth down by 5 per cent as well as also unemployment could go up by five percent."

Meanwhile, the unemployment rate among youths in the energy-rich region sits at 26.6 per cent, the World Bank data shows.

Since March, countries of the region, many of them heavily dependent on oil revenues, have resorted to sweeping lockdowns and curfews to prevent the spread of the coronavirus, disrupting local economies.

"We are at an important moment where there are hopes that (a) vaccine could accelerate the recovery, but also there are challenges with the risk of a second wave of the coronavirus," said International Monetary Fund’s Middle East and Central Asia director .