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IMF lowers growth expectations for Arab economies due to war on Gaza

February 1, 2024 at 1:01 pm

International Monetary Fund (IMF) [World Bank Photo Collection/Flickr]

The International Monetary Fund (IMF) has lowered its estimates for the growth of Middle Eastern and North African economies during the current year due to the Israeli war on Gaza and its repercussions in the southern Red Sea.

The fund stated in its report on the economic outlook for the Middle East and North Africa that its estimates indicate a 2.9 per cent growth for the Arab region in 2024. Growth was weak in 2023, at just two per cent, the IMF said.

These are 0.5 per cent lower than previously reported in October, when projections stood at 3.4 per cent.

“The heightened security situation in the Red Sea has raised concerns about the conflict’s impact on  trade and on shipping costs,” the IMF’s Jihad Azour explained. “Should the conflict escalate, a more severe or persistent negative impact on tourism could materialise.”

The war broke out when economic growth was already slowing in the region, while high levels of debt and unresolved inflation continued to pose significant problems in many economies.

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