DUBAI, April 11: Middle East economies are recovering from the coronavirus pandemic faster than anticipated, largely due to the acceleration of mass inoculation campaigns and an increase in oil prices. But the International Monetary Fund warned on Sunday that an uneven vaccine distribution would derail the region’s rebound, as the prospects of rich and poor countries diverge.
In its latest report, the IMF again revised upward its 2020 economic outlook for the Mideast and North Africa, now outlining just a 3.4 per cent contraction last year, with growth for the region’s oil exporters buoyed by a boom for commodities and rise in oil price, which hit $67 a barrel in March.
Even with an expected dip to $57 a barrel by the end of 2021, the surge from last year’s all-time lows is boosting the oil-rich nations of the Persian Gulf, such as the United Arab Emirates and Saudi Arabia, which also have moved swiftly toward widespread vaccination.
But elsewhere in the region, from Yemen and Sudan to Libya and Lebanon, where inflation soars, instability prevails and wars have left lasting scars, the damaging effects of the pandemic will drag on and cause economic harm, the IMF said – possibly for years to come.
“We are a year into the crisis and recovery is back, but it is a divergent recovery,” Jihad Azour, director of the Middle East and Central Asia department at the IMF, told The Associated Press. “We are at turning point. ... Vaccination policy is economic policy.” The IMF expects economic growth to reach 4 per cent for the Middle East this year. But that rosy outlook papers over the region’s deep economic divides.
For oil-rich economies, yawning deficits are expected to halve this year as revenues climb, more arms get jabbed and lockdown measures recede, said Azour. – AP