Economies across the Middle East and Central Asia will likely slow this year as persistently high inflation and rising interest rates bite into their post-pandemic gains, the International Monetary Fund said yestreday.
The IMF’s Regional Economic Outlook blamed in part rising energy costs, as well as elevated food prices, for the estimated slower growth.
The report said that while oil-dependent economies of the Gulf Arab states and others in the region have reaped the benefits of elevated crude prices, other countries — such as Pakistan — have seen growth collapse after an unprecedented flooding last summer or as economic woes worsened.
The regional slowdown also comes as an explosion of fighting in Sudan between two top rival generals threatens a nation where IMF and World Bank debt relief remains on hold.
Rising interest rates, used by central banks worldwide to try to stem inflation’s rise, increase the costs of borrowing money. That will affect nations carrying heavier debts, the IMF warned.
“This year we’re seeing inflation again being the most challenging issue for most of the countries,” Jihad Azour, the director of the Middle East and Central Asia Department at the IMF, told The Associated Press.
The IMF forecast predicts regional growth will drop from 5.3% last year to 3.1% this year.
