IMF calls for ‘urgent’ structural reform in GCC

Mena-based states must engage in structural reform if they are to ensure an inclusive economic recovery from the pandemic and provide more resilience for the future, according to the International Monetary Fund (IMF).

The IMF’s report, ‘Divergent Recoveries in Turbulent Times’, states that countries in the region underwent an economic recovery in 2021 that exceeded expectations.

The recovery has continued into the first half of 2022 amid a rise in inflation. The World Bank recently forecast that GCC economies would grow by 5.9% this year.

However, the IMF’s report states there are extraordinary headwinds and uncertainties facing the Mena economy, including the Ukraine war and a rise in commodity prices.

For oil-importing countries, there is the increasing cost of energy and food prices.

And while oil-exporting countries may benefit from the rising cost of energy, there is also the risk of volatility in oil prices.

“In the current macroeconomic environment, policymakers must prioritise accelerating structural reforms to mitigate the impact of tighter macroeconomic policies on growth, address long-term scarring from the pandemic and the war in Ukraine, and help pave the way toward a more resilient, inclusive, and greener future,” said Jihad Azour, director of the IMF’s Middle East and Central Asia Department.

©2022 funds global mena

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