The International Monetary Fund (IMF) has provided 15 countries in Middle East and Central Asia (MCD) with $70 billion in facilities amid the COVID-19 crisis, most of which went to the Arab region, director of the Middle East and Central Asia Department at the IMF Jihad Azour said.
Azour made his statements during the IMF press conference held virtually on Monday to announce the update of the regional economic outlook report.
According to Azour, Egypt, which maintains its positive economic growth projections, is adopting a number of mechanisms in its FY2020/2021 budget plan that aim to support the private sector and back the sectors most affected by the crisis, including tourism, industry and production, and the Suez Canal. Azour says this is why Egypt is expected to see an economic slowdown with a positive economic growth.
He added that Egypt has been given a total of $8 billion under the IMF’s rapid finance instrument and the stand-by agreement, and it is among the countries that have benefited the most from IMF facilities in the Arab region.
He also disclosed that the MENAP region (the Middle East, Afghanistan and Pakistan) is expected to witness a contraction in its growth to -7.3 percent, which is lower than the IMF’s April outlook by 3.1 percent.
Oil importing countries in the region, which include Egypt, are expected to witness a significant increase in debt levels to reach 95 percent of GDP, Azour said, adding that countries that enjoy robust fundamentals will be able to absorb such a shock, while others will be affected severely.
He also added that the private sector and small and medium enterprises (SMEs) have a great chance to grow amid the crisis, and the region’s governments should work on supporting such pivotal sectors to achieve economic development.
Tackling the COVID-19 crisis’ impacts, Azour said that the MCD region has to work to achieve financial stability, support the private sector and SMEs, and to push its economy forward by adopting technology solutions and digitalisation.
In this regard, Azour said that 50 percent of the MCD population is under the age of 30, which is a potential that should be tapped in various areas.
For global oil prices, Azour said that they are projected to record between $40 and $45 per barrel in 2020.
Egypt has managed to maintain its positive macroeconomic projections in 2020 and 2021, and the IMF expects the country to record a growth rate of 2 percent during 2020, making it the only country to achieve positive economic growth during the current fiscal year in the Middle East and North Africa.
In 2021, Egypt is expected to record real gross domestic product (GDP) of 2.8 percent, while the entire MENA region will achieve an economic contraction of 3.3 percent during 2020, according to the IMF.