02/12/2024 – 13:16
International Monetary Fund (IMF) Director General Kristalina Georgieva said that although uncertainties are still high, there is a little more confidence about the economic outlook, as the global economy has been surprisingly resilient and growth has exceeded expectations. expectations in 2023 and global inflation is expected to fall in 2024. “But we cannot declare victory prematurely”, he pointed out during the Eighth Annual Arab Fiscal Forum in Dubai.
Medium-term growth prospects remain weak at around 3%, compared to the historical average of around 3.8%, he noted.
According to Georgieva, the global economy can be boosted by factors such as the development of artificial intelligence. But with around 40% of jobs exposed to AI, its effects are uncertain. According to Georgieva, countries that do not have the infrastructure and qualified labor to take advantage of this technology could be left even further behind.
Georgieva highlights that the IMF expects Gross Domestic Product (GDP) growth for the Middle East and North Africa of close to 2.9% in 2024, surpassing the result presented last year, but below October's projections. “This is largely due to short-term cuts in oil production, the Gaza-Israel conflict and tight monetary policies, which are still necessary,” his speech said.
She stated that the Arab region has played an increasingly important role in a rapidly changing world. “In a time of economic challenges, geopolitical tension and war, it is very important that we plant seeds now – of growth and cooperation, of peace and prosperity,” said Georgieva, referring to the Arabic proverb that says “a tree begins with a seed ”.
Gaza-Israel conflict
The IMF director general highlighted that economically, the conflict was devastating for the Gaza region, where economic activity fell by 80% in the period between October and December last year compared to the previous year. In the West Bank, the drop reached 22% on the same basis of comparison. “The bleak outlook for the Palestinian economy is worsening as the conflict persists. Only a lasting peace and a political solution can fundamentally change it,” she said, highlighting that the war is weighing on local tourism.
Across the region and beyond, the impact is also felt through increased freight costs and reduced transit volumes in the Red Sea, with a drop of almost 50% this year, according to data from PortWatch.
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