IMF predicts worst Middle East downturn in half century

The International Monetary Fund (IMF) on Monday, July 13, again sharply lowered its Middle East and North Africa economic forecast, to its lowest level in 50 years, over the “twin shock” of the coronavirus pandemic and low oil prices.

The region’s economy will contract by 5.7% this year, and shrink by as much as 13% in countries torn by conflict, the Washington-based IMF warned.

The economic malaise will see poverty and unemployment rise, stoking social unrest, and send budget deficits and public debt surging, it said.

In its regional economic outlook update, the IMF projected the economies of the Middle East and North Africa to contract by 5.7% this year, 2.4 percentage points lower than its April forecast.

The projection is the lowest in over 50 years, according to World Bank data, and comes after the region posted modest growth last year.

The battered energy-based economies of the Gulf Cooperation Council (GCC) states are forecast to shrink by a hefty 7.1%, 4.4 percentage points lower than April.