The International Monetary Fund has revised upwards its growth forecasts for the Middle East and North Africa region as countries recover from the coronavirus crisis that began in 2020.
Real GDP in the MENA region is now expected to grow by 4% in 2021, above the fund’s projection of 3.2% in October.
However, the outlook will vary significantly from country to country depending on factors such as vaccine deployment, tourism exposure and policies introduced, the IMF said in its latest regional economic report released on Sunday.
(The) vaccine is an important variable this year and the acceleration of vaccination could contribute to almost an additional percentage of GDP in 2022.
Jihad Azour
IMF Director in the Middle East and Central Asia
Jihad Azour, director of the IMF’s Middle East and Central Asia department, said the recovery would be “divergent between countries and unequal between different parts of the population.”
He told CNBC’s Hadley Gamble that growth would be driven primarily by oil-exporting countries that will benefit from accelerated vaccination programs and the relative strength of oil prices.
Vaccines are an “important variable”
Azour said each country’s resilience in 2021 varies “a lot”.
“The vaccine (the) is an important variable this year and the acceleration of vaccination could contribute to almost an additional percentage of GDP in 2022,” he said.
Some countries in the region, such as the Gulf Cooperation Council states, Kazakhstan and Morocco, began vaccinations early and should be able to inoculate a significant portion of their population by the end of 2021, the IMF.
Other countries, including Afghanistan, Egypt, Iran, Iraq and Lebanon, were classified as “slow inoculators” that will likely vaccinate a large portion of their residents by mid-2022.
Shoppers wearing protective masks stroll near the Dubai Mall and the Burj Khalifa skyscraper in Dubai, UAE, on Wednesday, January 27, 2021.
Christopher Pike | Bloomberg | Getty Images
The latest group, the “late inoculators,” is not expected to get a “complete vaccination by 2023 at the earliest,” according to the report.
He added that the first inoculators are expected to reach 2019 GDP levels in 2022, but countries in the two slowest categories will recover to pre-pandemic levels between 2022 and 2023.
Looking ahead
Azour said innovative policies helped accelerate the recovery, but it is “very important to move forward better.”
This could include measures to improve the economy, attract investment, increase regional cooperation and address the scars of the Covid crisis.
“All of these items are silver liners that can help accelerate the recovery and bring the region’s economy (a) to the level of growth that existed before the Covid-19 crash,” he said.