Muhammad added that the rise in food prices would affect all Arab countries, stressing that the Ukraine crisis would constitute inflationary pressures on Arab countries and on some currencies in the region.
He considered that the economic growth in the oil-importing countries benefited from the easing of the restrictions of the Corona virus, and thus the growth rate of these countries achieved 4.2%, while the oil-exporting countries achieved a growth of 5.4%.
He referred to inflationary pressures that arose due to the war in Ukraine on all Arab countries importing grain and wheat, warning that this situation would be reflected in pressure on the exchange rates and systems in a number of Arab countries.
It is also expected that these pressures will affect the increase in the deficits in the balance of payments and the current account.
He expected the economies of the Middle East and North Africa to grow by 5.2% in 2022, the fastest growth rate since 2016, thanks to the unexpected returns from high oil prices, which are in the interest of the oil-exporting countries in the region.
But he cautioned against the growing uncertainty surrounding these predictions due to the ongoing war in Ukraine and the ongoing threats from coronavirus mutant.
Mohamed referred to what the World Bank expected in its report on the latest economic developments, entitled “Reviewing the Facts: Growth Forecasts in the Middle East and North Africa in Times of Uncertainty.”
He expected that the region would record an uneven recovery, as the averages in the region hide large differences, as the oil-producing countries benefit from high prices in addition to the increase in vaccination rates from the Corona virus, while countries suffering from fragility conditions lag behind.
monetary tightening
According to the report, inflation risks are growing in the entire region due to the tightening of monetary policy at the global level, the unpredictability of the developments of the Corona pandemic, the continuation of disruptions in supply chains, and the rise in food prices.
The World Bank has seen this wave of uncertainty as a major challenge for policy makers, and the World Bank is committed to working alongside governments in the Middle East and North Africa region during this time of heightened risks.
Currency depreciation in some countries of the region has already increased inflationary pressures. Economies with weak debt and public finances will likely face more challenges as they seek to extend the terms of existing debt or issue new debt instruments amid tightening financing conditions, while central banks around the world aim to contain inflation expectations.
The World Bank predicts that rising food prices and the risks of food insecurity are likely to cause the most harm to poor households, given that the poor usually spend most of their income on food and energy, unlike richer families.
The full extent of the effects of the war has yet to be determined, but initial indications are that the economic difficulties already afflicting the economies of the Middle East and North Africa, especially the oil-importing middle-income countries, are worsening.
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