DUBAI, October 28, 2019 (WAM) – The Dubai International Financial Center, DIFC, today hosted the launch of the October 2019 report on the International Monetary Fund’s Regional Economic Outlook for the Middle East, South Africa North, Afghanistan and Pakistan.
The report shows that the growth impact in the MENAP region of global headwinds has so far been mitigated. However, growth remains too weak to meet the needs of growing populations, while risks to the outlook have increased. They include uncertainties in world trade, volatility in oil prices, geopolitical tensions and national vulnerabilities in some countries.
Fiscal vulnerabilities, rising debt and high budget deficits continue to weigh on the region’s growth potential. The report therefore calls on governments to strengthen fiscal balances in an equitable manner, protecting the poor and the most vulnerable.
The report also stresses the need to accelerate structural reforms, including improving the business environment and modernizing the regulatory framework to stimulate private investment and promote job creation.
According to the IMF, these policies would put countries on a more sustainable and higher growth path, helping to boost competitiveness, attract foreign direct investment, FDI and fight against public debt. Greater transparency combined with stronger public procurement could reduce the volatility of discretionary public spending and improve predictability of fiscal policy.
The region has seen a sharp increase in portfolio and bank flows in recent years, which in many countries have helped finance external and fiscal deficits. While capital flows have remained resilient, the region’s increased integration into global financial markets has made it more exposed to changing market sentiment. Revitalizing FDI by easing restrictions and promoting macroeconomic stability while deepening domestic financial markets can provide more stable sources of finance, thereby mitigating the risk of volatile portfolio flows.
Peyman Al Awadhi, Senior Vice President and Official Spokesperson of the DIFC Authority, said: âWe are very proud to provide the prestigious IMF institution with a platform to define the key areas of the MENAP region that must be given priority in order to meet the challenges and maximize its potential. Supporting the IMF in its semi-annual regional economic outlook report is a key priority for the DIFC and reflects our strategic partnership to support the region’s economic diversity.
âAs the world’s top 10 international financial center, we strive to provide a stable financial ecosystem that allows businesses of all sizes to thrive. DIFC has already aligned its legal and regulatory standards with international best practices and we are proud to develop talent and provide businesses with ease of access to the MENAP region, using the DIFC as a stepping stone to growth. “
Global trade uncertainties and growing geopolitical tensions continue to affect the outlook for the MENAP region. There are growing fears about trade tensions between China and the United States and the potential for a messy Brexit, as it will reduce demand from countries like Morocco and Tunisia that share close ties to Europe.
Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said: âTo pave the way for higher growth in the face of a challenging global environment, countries in the region need to accelerate structural reforms that boost economic activity. the private sector and increase productivity.
âIn addition, oil exporters and importers should ensure that they can meet their fiscal targets while taking great care to protect poor communities and promote inclusion. It remains essential to provide young people with employment and other economic opportunities and to small and medium-sized enterprises. with better access to finance. Finally, improving economic governance, for example by making budget processes more transparent and strengthening fiscal institutions, would help put countries on a more sustainable and prosperous economic path. “
The IMF’s regional economic outlook report details trends and developments in countries in the Middle East, North Africa, Afghanistan, Pakistan, and the Central and Caucasus. The report’s findings and indicators are widely used as a benchmark for future economic projections and set the tone for growth, trade and investment.