São Paulo – The Middle East and North Africa (MENA) region started 2023 by growing slowly but surely and is expected to end the year seeing a 2.2% growth in its gross domestic product (GDP), according to a forecast released Tuesday (6) by the World Bank. For 2024 the financial institution expects a 3.3% in the region. Pictured, a food vendor on a street in Cairo, Egypt.
There are major differences in the results expected for each country, though. For 2023 the highest GDP growth in the MENA region will be Djibouti’s at 4.4%, followed by Egypt’s at 4%, and Qatar at 3.3%. Syria is expected to experience a slowdown of 5.2%, so are Iraq, which is expected to shrink by 1.1%, and Lebanon and Yemen, by 0.5%.
Regarding the scenario for the petroleum exporting economies, the World Bank pointed out that there has been a decline in the oil output late last year. According to the institution, these countries saw a high growth over the past decade and low unemployment rate last year but now announced oil production cuts, and despite the price boost, global demand has spluttered, thus slowing down the activity.
“In Qatar the economic growth slowed down early this year, following a higher growth in the last quarter of 2022 due to the FIFA World Cup”, said the World Bank in its report.
The petroleum importing countries, though, saw their adverse economic situation continue in 2023, with the first half of the year’s inflation reaching levels that hadn’t been seen for over a decade. In Egypt the limited access to dollars and a more flexible exchange rate made the pound lose half of its value from the beginning of 2022 to May 2023.
In Morocco, the extended drought and high inflation has dampened the growth and caused the unemployment, rate to peak last March at the COVID-19 pandemic’s level, the World Bank report went on. The institution expects an economic growth of 2.5% for the Moroccan economy this year and 3.3% for the next.
The World Bank said economic risks are higher for oil importers than for commodity exporters in the region, although the latter remain highly dependent on oil revenues and may suffer from the effects of the global pressure for transitioning to green energies. Oil importers are more vulnerable to markets due to government debt levels and foreign exchange reserves.
Besides those already mentioned above, the World Bank expects 2023 growth rates in the region of 1.7% for Algeria, 2.7% for Bahrain, 2.2% for Iran (which is not Arab), 2.4% for Jordan, 1.3% for Kuwait, 1.5% for Oman, 2.2% for Saudi Arabia, 2.3% for Tunisia, 2.8% for the United Arab Emirates, and 3% for Palestine.
Translated by Guilherme Miranda
