The Middle East and North Africa (Mena) region’s economic growth is projected to exceed the global average this year, reaching 3.6 per cent, according to Kristalina Georgieva, managing director of the International Monetary Fund (IMF).
Speaking at the World Governments Summit in Dubai, Ms Georgieva cautioned that this growth, while positive, remains weaker than pre-pandemic levels, emphasising the need for countries to proactively address the risk of a low-growth, high-debt trap.
The IMF forecasts global growth to remain steady at 3.3pc for both this year and the next, before slowing to 3pc, a figure significantly below historical averages.
Mena’s projected rebound to 3.6pc is attributed to a recovery in oil production and a reduction in regional conflicts.
Ms Georgieva highlighted the importance of digitalisation, noting that “digitalised countries have substantially higher productivity than those that are less so, with some in the region among the most developed in the world in this area.”
She pointed to the potential of digital innovation, particularly AI technologies, to significantly boost the UAE’s GDP by 2030, and stressed the need for increased research and development spending to further enhance productivity.
Ms Georgieva cited Saudi Arabia as an example of a nation successfully reducing its economic footprint and strengthening governance through regulatory improvements, thereby encouraging private sector investment, particularly in the non-oil economy.
She also acknowledged the UAE’s National Agenda for Entrepreneurship for fostering a dynamic start-up environment and Morocco’s New Model of Development for its focus on stimulating markets by improving public sector governance.
Despite progress in controlling inflation globally, Georgieva noted a recent resurgence in some countries, potentially leading to diverging interest rates and higher borrowing costs for emerging markets and developing economies.
Ms Georgieva also expressed concern about rising global public debt, projected to reach 100pc of GDP by 2030, with many Mena countries facing debt levels of 70pc of GDP, increasing the risk of a low-growth, high-debt scenario.
To mitigate these risks, she urged Mena nations to focus on job creation, strengthening social safety nets, building resilience to increasingly frequent natural disasters, and supporting economic diversification.
Finally, Ms Georgieva observed a global shift in government priorities, citing the US’s intention to take action in trade, tax, spending, deregulation, and digital assets.
She concluded that “recipes of the past may no longer provide the path to prosperity,” emphasising the need for innovative and adaptable economic strategies.
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