DUBAI, United Arab Emirates (AP) – Middle East economies are recovering faster than expected from the coronavirus epidemic, largely due to accelerated mass vaccination campaigns and rising oil prices. But the International Monetary Fund warned on Sunday that unequal distribution of vaccines would frustrate the region’s return as the prospects of rich and poor countries differ.
In its latest report, the International Monetary Fund (IMF) revised its economic outlook for the Middle East and North Africa to just 3.4 percent last year, boosting oil exports to the region by booming oil prices to $ 67 a barrel in March. Even with the expected decline in the barrel at the end of 2021, the low growth of all levels last year is stimulated by the oil-rich countries of the Persian Gulf, such as the United Arab Emirates and Saudi Arabia, which have also moved rapidly to widespread vaccination.
But elsewhere in the region, from Yemen to Sudan to Libya to Lebanon, where inflation is rising, instability is rampant, wars are long overdue, the devastating effects of the epidemic will be prolonged, and the economy will suffer economic losses, the IMF said. come on
“We have been in a crisis for a year, the recovery is back, but it is a different kind of recovery,” Iha Ihad Azur, the IMF’s Middle East and Central Asia director, told the Associated Press. “We are at a turning point. “Vaccine policy is an economic policy.”
The IMF expects Middle East economic growth to reach 4% this year. But these rosy prospective documents on the region’s deep economic divisions.
For oil-rich economies, the yawning deficit is expected to narrow this year as incomes rise, more weapons fall, and blockades recede. Saudi Arabia’s economy will grow by 2.9%, down from 4.1% last year, due to strong government controls and oil price shocks. Higher oil prices come as the Organization of the Petroleum Exporting Countries (OPEC), its allies, has been shutting down production, and the United States is unlikely to lift sanctions on Iran’s potential oil sector.
The IMF expects the UAE economy to grow by 3.2% this year, and the Dubai World Expo, now scheduled for October 2021, is the key to the nation’s recovery. Dubai hopes the mass event could attract 25 million visitors – a series of deals signaling the future of an explosive pandemic.
The UAE has launched one of the fastest vaccination campaigns in the world, with more than 90 doses per 100 inhabitants this week. The collapse of hospitality, tourism and retail is still a challenge for luxury Dubai, where a cascade of layoffs hit foreign workers, reducing the UAE population by 8.4%, according to the rating agency S&P Global.
The outlook is easier for fragile emerging economies, many with delayed vaccination campaigns, low fiscal stimulus resources, and revenues that are largely collected from areas such as tourism that have slowly recovered from the epidemic.
While rich countries plan to vaccinate most of their populations in a few months, areas in the region from Afghanistan, Gaza to Iraq to Iran are unlikely to vaccinate much of their population until mid-2022, the IMF said.
Even that assessment can be optimistic. The introduction states that the lowest-income countries in the region can initially expect mass vaccinations by 2023. In many countries, meanwhile, affected healthcare systems are strained by waves of resurgent infections, prompting authorities to impose new restrictions and cause more economic pain.
The IMF expects a slow recovery of 2021 for Egypt և Pakistan. Oil importers depend on tourism, which emigrated to foreign investors last year. The fund has revised its growth forecast for Jordan, where youth unemployment has risen to 55%. Sudan remains in debt, threatening instability, but for the first time in recent years, its economy could grow as it gains new access to international financial networks.
Lebanon, once in the midst of its biggest financial crisis, remains the only east-facing economy at risk of further contraction. The country has defaulted on its debt, failed to implement economic reforms, let alone form a government. A huge explosion in the port of Beirut last year wreaked havoc on the capital. Discussions with the IMF did not lead to leaving the government.
Azour even refused to offer a certain economic forecast for Lebanon this year, citing “all the uncertainties.”
In Iran, the IMF praised economic growth after years of decline, noting that the government’s resistance to virus-induced blockades that would collapse the sanctions-stricken economy saved it from a worsening post-epidemic situation. The country’s economy is expected to grow by 2.5% in 2021.
But Iran’s recovery is far from over, as its vaccines lag behind, inflation cuts off people’s savings, and economic policy ignores the most vulnerable. The IMF continues to consider a request for $ 5 billion in aid to Iran, which will be its first loan since 1962. At the same time, US sanctions remain in place as fierce discussions begin with world powers over the return of Tehran’s broken 2015 nuclear deal.
“The recent lifting of sanctions will, of course, allow the Iranian economy to export more, to trade more, it will have a positive effect,” Azur said, urging the government to curb inflation and better engage the private sector.
Despite deteriorating inequality, the epidemic has shown that the capabilities of the richest and poorest countries in the Middle East are increasingly intertwined. Surgical Infections և Vaccination in any part of the region can spread new options that threaten the overall economic and public health, according to the IMF.
“Therefore, any regional cooperation will be welcomed moving forward,” Azur said.