The International Monetary Fund has revised its growth forecast for the Middle East and North Africa region upwards as the countries recover from the coronavirus crisis that began in 2020.
Real GDP in the MENA region is now projected to grow 4% in 2021, compared to the fund’s October forecast of 3.2%.
However, the outlook will vary significantly from country to country depending on factors such as vaccine adoption, exposure to tourism, and policies in place, the IMF said in its latest regional economic report released on Sunday.
Vaccine is an important variable this year, and speeding up vaccination could add almost an additional percent of GDP in 2022.
Director of the IMF for the Middle East and Central Asia
Jihad Azour, director of the IMF’s Middle East and Central Asia division, said the recovery was “different between countries and uneven between different segments of the population”.
He told CNBC’s Hadley Gamble that growth will be mainly driven by oil exporting countries, which will benefit from the acceleration in vaccination programs and the relative strength of oil prices.
Vaccines an “important variable”
Azour said each country’s ability to recover in 2021 will be “very different”.
“Vaccine is an important variable this year, and accelerating vaccination could add almost an additional percent of GDP in 2022,” he said.
Some countries in the region – such as the Gulf Cooperation Council states, Kazakhstan and Morocco – started their vaccinations early and should be able to vaccinate a significant portion of their population by the end of 2021, the IMF said.
Other nations, including Afghanistan, Egypt, Iran, Iraq, and Lebanon, have been classified as “slow vaccines” that are likely to vaccinate a large proportion of their residents by mid-2022.
Shoppers in protective masks walk near the Dubai Mall and the Burj Khalifa skyscraper in Dubai, United Arab Emirates on Wednesday, January 27, 2021.
Christopher Pike | Bloomberg | Getty Images
The last group – the “late vaccinators” – are not expected to “achieve full vaccination until 2023 at the earliest,” the report said.
It added that early vaccines are expected to hit 2019 GDP levels in 2022, but countries in the two slower categories will recover to pre-pandemic levels between 2022 and 2023.
Azour said innovative guidelines have helped speed the recovery, but it is “very important to do better”.
This could include measures to improve the economy, attract investment, strengthen regional cooperation and tackle the scars of the Covid crisis.
“All of these elements are silver linings that can help accelerate the recovery and bring the region’s economy to levels of growth that existed before the Covid-19 shock,” he said.