IMF: Growth of Middle East economies will slow due to decline in oil production and Gaza war

The International Monetary Fund revealed on Sunday that even in light of the solid global economic outlook, the Middle East's economy will slow in 2024 due to declining oil production and the war on Gaza.

“Although uncertainty remains high, we are a little more confident about the economic outlook because the global economy is surprisingly resilient,” Kristalina Georgieva, director of the International Monetary Fund, told the Arab Finance Forum in Dubai, but she noted the possibility of a broader impact. Warned about. on regional economies as a result of the ongoing war on Gaza.

Georgieva said the economies of Israel's neighboring countries and the Palestinian territories have seen the impact of the conflict on tourism revenues, and she said the fund is closely monitoring the financial impacts.

He said the impact of the conflict in the Middle East is evident in increased shipping costs and reduced traffic through the Red Sea., He said that the expansion of this conflict could increase the economic damage at the global level.

The Houthis have been targeting commercial ships in the Red Sea since mid-November and say their attacks show solidarity with Palestinians amid Israel's war on Gaza.

Many international shipping companies diverted their ship traffic to the Cape of Good Hope route, which is longer than Egypt's Suez Canal route.

In the latest update on the state of the regional economy published by the Fund last month, the Fund revised its GDP growth expectations for the Middle East and North Africa region to 2.9% this year, below its expectations. is less. Last October, and one reason for this is the long-term cut in oil production, the conflict in Qusair and Gaza.

Georgieva also pointed out that the war had destroyed the economy of the Gaza Strip and the occupied West Bank, believing that only “permanent peace” would improve prospects.

According to Georgieva, economic activity in the Strip declined by 80% between last October and December compared to the previous year, and she said the decline in the West Bank reached 22%.

Support energy and tsunami artificial intelligence

In another matter, Georgieva said the International Monetary Fund will publish a document tomorrow, Monday, showing that the gradual cancellation of energy subsidies could save $336 billion in the Middle East region, including Iraq and That's equal to the combined economy of Libya.

According to a copy of the letter posted on the International Monetary Fund's website, he said that in addition to saving this amount, phasing out energy subsidies “reduces pollution and helps improve social spending.” “.

The IMF says fossil fuel support in the Middle East and North Africa region could reach 19% of GDP in 2022.

It recommends phasing out energy subsidies within the region's economies, including oil-exporting countries, proposing targeted subsidies as an alternative.

Regarding advanced technology, Georgieva said that 40% of jobs globally are vulnerable to being affected by artificial intelligence, and countries that lack infrastructure investment and skilled workforce are lagging behind.

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