Tariffs, oil costs and different uncertainties weighing down Mideast economies, IMF says

DUBAI, United Arab Emirates (AP) — International locations throughout the Center East and North Africa face important challenges to financial progress because the area faces financial uncertainty as a result of tariff measures, lower-than-recent oil costs and cuts to monetary support, the Worldwide Financial Fund mentioned Wednesday.

The IMF’s regional outlook report for the MENA area mentioned Brent crude oil costs — that are down from highs above $120 a barrel in 2022 — are prone to be $65 to $69 per barrel in 2025 and 2026, making energy-exporting economies susceptible to market fluctuations.

Tariff plans by the U.S. and different nations and geopolitical tensions even have created mounting financial uncertainty globally that’s weighing down on the area’s economies, which might negatively affect their progress by anyplace from 2% to 4.5%, mentioned Jihad Azour, director for Center East and Central Asia on the IMF.

“Due to this fact nations have to react and wish to plot insurance policies as a way to defend their economies,” Azour mentioned in an interview in Dubai.

Reductions in overseas support coming into the area additionally will play a job, Azour mentioned, as U.S. President Donald Trump has pulled his nation again from its place because the world’s single largest support donor.

“The drop in worldwide help, particularly for nations in fragility, is one thing that’s creating new dangers for the area,” Azour mentioned.

Progress within the MENA area is anticipated to be 2.6% this 12 months, as in comparison with 1.8% final 12 months, Azour mentioned, however he added that international uncertainty might affect the outlook.

Economies within the Persian Gulf proceed to draw substantial overseas direct funding, rising by practically 2% of GDP for the reason that pandemic, whereas different MENA nations battle with slower inflows.

The IMF says it’s keen to work with among the struggling nations and the brand new authorities in Syria. He additionally mentioned that IMF employees and Lebanese officers had been in discussions in Lebanon.

“The Syria restoration can be a protracted course of that might require mobilization of regional and worldwide help and likewise a complete program of constructing establishments, reforming their economic system, and likewise addressing a sure variety of key points like infrastructure, refugees and rebuilding a brand new social contact,” Azour mentioned.

Regardless of the worldwide financial uncertainty, MENA nations can drive progress by way of structural reforms and diversifying financial ties, the report mentioned.