ME, Central Asia to lose Dh1.56T due to virus: IMF

dubai — Middle East and Central Asian countries will lose $425 billion (Dh1.56 trillion) of their output due to the impact of coronavirus, based on the 4 per cent cut in their average growth, International Monetary Fund said on Wednesday.

Oil exporting countries in the region, meanwhile, will lose $250 billion (Dh917.5 billion) in oil exports due to the decline in crude exports and prices.

Jihad Azour, director for the Middle East and Central Asia at the IMF, said the region will see a contraction this year bigger than the one seen during the 2008 global financial crisis and the 2015 oil price shock.

It said real GDP among regional oil exporters could contract by 4.2 per cent this year, a sharp downward revision from the IMF’s 2.1 per cent growth projected in October last year.

A record output cut agreement on Sunday between international producers could provide some support to oil prices, the IMF said, but “decreases in oil prices are so large that fiscal and export revenues are expected to decline across all oil-exporting countries in the region, including those that might manage to gain market share from higher-cost producers”.

Overall economic growth in the region is expected to fall from 1.2 per cent in 2019 to a 2.8 per cent contraction this year, said the fund, which however expects growth to pick up again to 4 per cent next year as threats from the coronavirus pandemic recede.

“Necessary containment measures to halt the spread of the virus have affected job-rich sectors across the region, with negative effects on confidence and non-oil

activity,” the IMF said in its Regional Economic Outlook.

Azour said the Mena region plus Afghanistan and Pakistan will contract 3.1 per cent. He advised regional governments to avoid non-special spending and spare those funds for more important purposes if and when needed.