IMF: Global uncertainty weighing on MENA economies

The International Monetary Fund says countries across the Middle East and North Africa face significant challenges to economic growth as they face uncertainty due to tariff measures, lower-than-recent oil prices and cuts to financial aid.

In its outlook report for the MENA region, the United Nations financial agency says Brent crude oil prices - which are down from highs above $120 a barrel in 2022 - are likely to be $65 to $69 per barrel in 2025 and 2026.

This will make energy-exporting economies vulnerable to market fluctuations, it adds.

Tariff plans by the U.S. and other countries and geopolitical tensions also have created mounting global uncertainty that is weighing down on the region's economies.

And this could negatively impact their growth by anywhere from 2% to 4.5%, explains Jihad Azour, who is the director for Middle East and Central Asia at the IMF.

Reductions in foreign aid coming into the region also will play a role, Azour adds, especially after U.S. President Donald Trump pulled his country back from its position as the world’s single largest aid donor.

Although growth in the MENA region is expected to be 2.6% this year, as compared to 1.8% last year, he adds that the global economic uncertainty could impact the outlook.

And he urges countries in the region to "devise policies in order to protect their economies”.

Despite the global economic uncertainty, MENA nations can drive growth through structural reforms and diversifying economic ties, the IMF report says.

Economies in the Persian Gulf continue to attract substantial foreign direct investment, rising by nearly 2% of GDP since the pandemic, while other MENA nations struggle with slower inflows.

The IMF says it is willing to work with some of the struggling nations and the new government in Syria.

Speaking in Dubai, Azour also says that IMF staff and Lebanese officials are in discussions.