The International Monetary Fund (IMF) downgraded its outlook for Middle East and Central Asian economic recovery, predicting a 4.1% contraction for the region as a whole, according to latest data released by the international organization.
The predicted 4.1% contraction is 1.3 percentage points worse than its previous assessment in April, according to the IMF’s latest regional outlook report released Monday.
Per CNBC, Jihad Azour, director of the IMF’s Middle East and Central Asia department, noted a large disparity in economic loss between oil importing and exporting countries as the region has been hit by the coronavirus pandemic and a plunge in oil prices.
“Combined together, those two shocks led to a sharp decline in economic activity that is different between oil exporting and oil importing countries,” Azour told CNBC’s Hadley Gamble via video call on Sunday. “On average, we will see growth going negative by 6.6% for oil exporting countries, and negative growth of 1% for all importing countries,” he said, adding that there will be differences between the countries within each group.
The IMF notes that oil prices will continue to remain under pressure in 2021 as the pandemic continues to take a toll on demand.
Oil prices will be the most important factor for oil exporters’ recovery, the IMF says, particularly states like Saudi Arabia, Iraq, Iran, the UAE, Bahrain and Kuwait, for whom the commodity makes up the majority of revenue.
[Click here to read the IMF’s Regional Economic Outlook, October 2020, Middle East and Central Asia and Click here to read the Transcript of October 2020 Middle East and Central Asia Department Press Briefing]
