While the nations that export oil profit from unaccounted-for oil gains totaling a trillion dollars expected to occur between 2022 and 2026, emerging markets and nations with moderate incomes experience a severe shock as a result of the indicator of trade exchange rates in terms of export value relative to import value.
Before the release of the October report, Jihad Azour, Director of the International Monetary Fund for the Middle East and Central Asia, told Reuters that these nations should be on high alert due to “an increase in the opposite winds, increased weaknesses” due to the slowdown in the global economy, the fluctuation of food and energy prices, and tightening financing conditions.
He added that the region needs to “move now, act quickly and work in a comprehensive way” in structural reforms, and that oil exporters should take advantage of this opportunity to enhance their conditions to protect from shocks.
Addressing the problem in living costs by raising prices, defending vulnerable people with targeted aid, and maintaining food security is one of the most pressing challenges.
In a report, the International Monetary Fund forewarned of widespread expansion, stating that “the high food prices and the growth in food and energy deficiency may lead to food insecurity and social disorders, especially in 2023.”
GDP growth in the Middle East and North Africa is anticipated to increase to 5% this year from 4.1% in 2021 before slowing to 3.6% in 2023.
Estimates for inflation put it at 12.1% this year and 11.2% the following.
During the fiscal year 2022–2023, it is anticipated that high interest payments and increased reliance on short-term financing in some emerging markets and countries with middle incomes will raise the total amount needed for general financing to $ 550 billion, up by 22 billion over the previous year.
According to the analysis from the Fund, the Caucasus and Central Asia were less affected by the Ukraine war than was anticipated, with a GDP slowdown of 3.
8 percent in 2022, which represents an uptick from projections of 2. six per cent.
The Caucasus and Central Asia are expected to increase at a rate of five percent, according to the IMF. In 2021, 6 percent.
This is due to the upward review of the GDP of Russia, the unexpected expatriate flows such as the transfer of workers and companies from Russia, large financial transfers, trade flexibility, and financial stimuli in countries such as Kazakhstan and Tajikistan.
The International Monetary Fund expected the 2023 economic growth at 4 percent and is likely to shrink to 3. 5 percent over the long term.
IMF: Flexible economies in the Middle East
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