The annual IMF-World Bank meetings are currently taking place in Morocco, but the conflict between Israel and Hamas has put a shadow over them and soured the outlook for an already weak global economy.
For the first time in 20 years, the meeting of the international lenders, which includes finance ministers and central bankers from all over the world, is taking place in an Arab nation.
“In the Middle East and North Africa, we have lowered our real GDP growth forecast to 2 per cent for 2023, a downgrade by 1,1 percentage point from our last projections in April,” said Jihad Azour, director of the IMF’s Middle East and Central Asia department.
He emphasized that persistent structural challenges would hinder medium-term growth.
“Crucially, the projected growth is not expected to be robust or comprehensive enough to generate sufficient employment opportunities for the hundred million Arab youth entering the workforce in the next decade,” Azour stated.
The slowdown is also influenced by reduced oil production, stringent policies in emerging market and middle-income economies, the Sudan conflict, and other nation-specific factors.
This projection occurred before the conflict, and Azour acknowledged that it was challenging to gauge its economic impact, describing the situation as a significant and seismic event.
Nonetheless, the IMF anticipates that economic growth in the Middle East and North Africa region will accelerate to 3.4 percent in 2024.