The Middle East and North Africa (MENA) region’s output is projected to contract by 5.2 percent, 4.1 percent below the World Bank's (WB) forecast in April and 7.8 percent below October 2019 forecasts, said senior economist for MENA at the WB Ha Nguyen, adding that MENA’s output costs of the dual shock resulting from the coronavirus and the collapse in global oil prices are estimated at $230 billion.
Nguyen's statements came at a press briefing on Monday to launch the WB’s economic outlook update for MENA.
He added that the region’s output is projected to rebound to 1.9 percent in 2021.
Egypt’s strong monetary policy, issuing sovereign bonds since the onset of the COVID-19 crisis and its responding policies to the pandemic have contributed to keeping the country’s positive economic outlook through 2020, said the WB's Practice Manager for Macroeconomics in MENA Kevin Carey.
Carey's statements were in answer to an Ahram Online question on the reasons Egypt has maintained its positive economic outlook through 2020, which is expected at 3.5 percent, according to the WB Economic Outlook for MENA region update report.
He added that Egypt’s economy was hit severely over three quarters for two fiscal years, including the fourth quarter of FY 2019/2020, which ended in June 2020, in addition to the first and second quarters of the current FY 2020/2021, stating that they were difficult for the country’s economy and that they will reflect on 2021 that is expected to witness a contraction of 2.3 percent.
Meanwhile, Nguyen said that Egypt, Saudi Arabia and the UAE are the only countries in MENA that have managed to stabilise their economies throughout the crisis, citing their Purchasing Manager’s Index (PMI) that has exceeded 50 points.
For MENA, Nguyen said the region is expected to witness a drop in its GDP by 7.8 percent in 2020, and to fall by 8.7 percent in 2021 due to the crisis.
Answering an Ahram Online question on the WB’s proposed framework for trade integration in MENA and how it can, if implemented, accelerate MENA’s recovery phase, Manager of the Centre for Mediterranean Integration at the WB Blanca Moreno-Dodson stressed that the region has to tap into the available opportunities amid the crisis through adopting a new medium-term trade integration among its countries and to focus on sectors that enjoy high potential for growth.
She noted that MENA is one of the least integrated regions in the world, adding that the region will benefit from regional trade integration while opening the way towards global trade integration.