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On Wednesday, April 27, local time, the International Monetary Fund (IMF) released its latest report on the Middle East and Central Asia, saying that high energy prices will boost the economies of Arab oil exporters this year and next year and expand their fiscal reserves.
Due to the impact of the Russian-Ukrainian crisis, the export of agricultural products such as sunflower oil, barley and wheat in the Black Sea region has been blocked. The IMF noted that countries such as Arab oil exporters and Egypt are extremely dependent on food in the Black Sea region, so their economies will be hit hard this year.
However, high energy prices have spared oil-producing countries. Saudi Arabia's economic growth rate is expected to reach 7.6 percent this year, the report shows. Kuwait is another country in the region that is highly dependent on oil export earnings, and the IMF expects its economy to grow by 8 percent in 2022 — a significant reversal from just 1 percent growth last year and contraction of nearly 9 percent in 2020.
In addition, the report predicts that Iraq's economic growth will reach 9.5%, ranking first in the Middle East and North Africa region.
Jihad Azour, head of the IMF's Middle East and Central Asia division, told the media that overall, the group expects additional money and financial reserves to flow into Middle Eastern oil exporters to exceed $1 trillion over the next five years.
The IMF expects the Gulf oil states to produce about 18 million barrels of oil per day this year, of which about 77.8 percent is used for exports. Most of this oil will be produced in Saudi Arabia.
In contrast, the region's non-major oil producers will face a difficult year. The economic situation in countries such as Syria and Lebanon is so poor that the IMF has failed to generate economic forecasts for both countries. The Syrian civil war has been going on for decades, while the IMF's last record of Lebanon's economic data was stuck in 2020, when the country's economy contracted by 22 percent.
In addition, Egypt, the most populous country in the Middle East, also faces many disadvantages. The IMF expects its economy to grow by nearly 6 percent this year, but growth will fall by a percentage point to 5 percent in 2023.
Imports from Middle Eastern countries are expected to increase by about $9 billion this year due to rising wheat prices triggered by the situation in Russia and Ukraine, while Egypt's imports will increase by $1 billion to $2 billion. In addition, as Egypt's inflation rate is expected to reach 10.4 percent this year, the government has eased its exchange rate, devaluing the currency by 15 percent in recent weeks.
Ahead of the Release of the Middle East and Central Asia Report, the IMF released its Global Economic Report, which cut the outlook for the world economy this year to 3.6 percent from 4.4 percent in January.
(Jin Liwei)