MENA economies face decline amid tariffs and oil price drops

Countries throughout the Middle East and North Africa are encountering significant economic challenges as reported by the International Monetary Fund. Ongoing economic uncertainty is attributed to tariff measures introduced by the United States and other nations, decreases in oil prices from over $120 a barrel in 2022 to predicted levels of $65 to $69 per barrel in 2025 and 2026, and cuts in financial aid. In Dubai, IMF Director Jihad Azour remarked that these factors could limit economic growth by 2% to 4.5%, emphasizing the need for governments to adopt policies to safeguard their economies. Azour highlighted that growth in the MENA region is forecasted to be 2.6% this year, an improvement from last year’s 1.8%. However, he cautioned that global uncertainties could affect this positive outlook. Despite these challenges, economies in the Persian Gulf continue to attract foreign direct investment, boosting by nearly 2% of GDP since the pandemic, while other MENA countries struggle to maintain investments. The IMF has expressed its willingness to assist nations facing economic difficulties, including the new Syrian government. Azour noted the long process required for Syria’s recovery, which involves garnering regional and international support, implementing institutional reforms, revamping economic strategies, and addressing critical issues like infrastructure and refugee management. The report suggests that, amidst the global economic turmoil, MENA countries can potentially stimulate growth through structural reforms and diversifying their economic partnerships. These measures could help them mitigate vulnerabilities and navigate the uncertainties affecting their economies.