Mubasher: The International Monetary Fund (IMF) expects the MENA region's economy will retreat by 5.7% in 2020, compared to its April forecast of 3.3%, Bloomberg reported.
The sharp decrease in oil prices and uncertainty around the duration of the coronavirus (COVID-19) pandemic has threatened the global economic recovery, as shown by the IMF's regional economic outlook in July.
As for the region's oil exporters, the economic growth would contract by 7.3% in 2020 due to fluctuation in oil prices and the COVID-19 impact on their balance sheets,
On the other hand, the oil importers' growth is forecast to shrink 1.1%, as the benefits from lower oil prices are being offset by hampered trade, tourism, and remittances, as well as tighter global financial conditions.
The IMF report referred that although the region’s banking systems appear resilient and well-capitalised, existing vulnerabilities could raise nonperforming loans if the crisis lasted for a longer period.
"As the pandemic wanes, countries should facilitate recovery by easing the reallocation of workers and resources, as needed, while resuming gradual fiscal adjustment and rebuilding policy buffers. Multilateral support can play a key role in helping countries surmount these shocks," the report concluded.