Against a backdrop of conflict and global division, the Middle East is positioned to pursue medium-term economic growth, according to a senior official from the International Monetary Fund on Friday. Jihad Azour, the IMF’s regional director for the Middle East and North Africa, urged countries to move forward with necessary structural reforms.
“We are now at one of those defining moments in the region. Challenges are extremely immense, uncertainty is at its peak,” Azour stated during a panel at the annual meetings in Washington, emphasizing the importance of aligning actions with goals.
The panel, titled Creating Jobs and Boosting Growth: Delivering on the Marrakesh Call for Action, follows the IMF’s call last year, led by Managing Director Kristalina Georgieva, for inclusive economic growth in the Middle East and North Africa. At last year’s annual meetings in Marrakesh, the IMF proposed five key actions to drive this growth, including strengthening the private sector, improving social protections, creating more opportunities for youth, enhancing women’s economic participation, and prioritizing green economy initiatives.
Despite these recommendations, the region’s growth has been hindered by recent conflicts and Opec production cuts. The IMF this week reduced its growth outlook for the Middle East to 2.1% from its April forecast, though a recovery to 4.5% growth is anticipated by 2025.
“Looking at the short term is not enough to understand why the region is not performing as much as it should, given the human capital it has, given the resources, and also given the ample size of capital,” Mr. Azour said, attributing part of the region’s performance issues to slow progress on structural reforms.
Azour highlighted the importance of a private sector-led approach to growth, noting that while some states believe they can outperform the private sector, “every analysis shows this is not the case.” Paola Subacchi, a professor at the University of Bologna, added that the region needs to leverage its young population and bring more people, including women, into the workforce to prevent “a generation that is left behind.”
The IMF will unveil its full Regional Economic Outlook on the Middle East from Dubai next week.
