## Launch of the IMF’s October 2022 Regional Economic Outlook for the Middle East and North Africa

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**Canonical URL:** [Launch of the IMF’s October 2022 Regional Economic Outlook for the Middle East and North Africa](https://www.imf.org/-/media/files/publications/reo/mcd-cca/2022/october/english/eng-press.pdf)

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### Regional snapshot and near-term projections
- Overall regional growth is projected at 5 percent in 2022, up from 4.1 percent in 2021.
- Growth for the region is projected to slow to 3.6 percent in 2023.
- Oil exporters:
  - Economic growth foreseen at 5.2 percent in 2022, up from 4.5 percent in 2021.
  - Growth projected to slow to 3.5 percent in 2023 as OPEC+ production wanes, oil prices ease, and global demand slows.
- Emerging market and middle-income economies:
  - Projected growth at 4.9 percent in 2022, up from 3.6 percent in 2021.
  - Growth expected to slow to 3.9 percent in 2023.
- Low-income countries:
  - Growth expected to remain weak at 0.8 percent in 2022.
- Inflation:
  - Headline inflation for the region is projected at 14.2 percent on average in 2022.
  - Inflation is expected to remain in double digits in 2023 for the fourth consecutive year.

### Key risks and macro-financial concerns
- Worsening global conditions create exceptional uncertainties and downside risks for MENA.
- Persistently high commodity prices and pervasive food shortages increase risks of:
  - Food insecurity,
  - Social unrest,
  - Fiscal pressures.
- Tighter-than-expected financial conditions risk:
  - Fueling a funding crunch in the region’s emerging markets,
  - Tipping the balance toward financial instability and debt distress in countries with weaker starting positions.
- Broadening inflation may require deeper disinflationary policies, which could be more costly than expected.

### Policy priorities and recommendations
- Immediate objective: mitigate the cost-of-living crisis while preserving fiscal sustainability and building resilience.
- Monetary policy:
  - Restore price stability by tightening monetary policy in countries where inflation is becoming broad-based or where there are signs of a de-anchoring of inflation expectations.
- Food security and agriculture:
  - Tackle food insecurity by scaling up next season’s agricultural production through securing access to fertilizers and investing in climate-resilient agriculture.
  - Use temporary food subsidies when targeted assistance is not feasible and food insecurity looms large.
- Fiscal policy and social protection:
  - Protect the vulnerable while ensuring fiscal sustainability, with support targeted to those in need to contribute to disinflation while supporting social cohesion.
  - Avoid regressive and costly energy subsidies and tax exemptions.
  - Maintain debt sustainability; accelerate fiscal adjustment where fiscal space is limited.
- Oil-exporter specific guidance:
  - Maximize benefits of the oil windfall by building buffers and avoiding procyclical spending.
  - Keep fiscal reform momentum and progress with diversification plans.
- Structural reforms to bolster inclusive and resilient growth:
  - Complete energy subsidy reforms in conjunction with enhancing social safety nets to free resources for expanding social protection.
  - Invest in energy efficiency to reduce energy dependency and exposure to oil price fluctuations.
  - Improve the business environment, reduce informality, improve tax equity, and invest in climate-resilient technology and infrastructure.
- Fiscal resilience and commodity-price shocks:
  - Consider cost-effective measures to address pressures from rising food and fuel prices.
  - Pursue reforms to enhance fiscal resilience, including reduced dependency on fuel ahead of the next commodity cycle.

### IMF support and institutional responses
- The IMF continues regional surveillance, lending arrangements, tailored policy advice, and technical assistance for MENA countries.
- New instruments and facilities mentioned:
  - The Resilience and Sustainability Trust to support building resilience to external shocks and address longer-term challenges, including climate change.
  - A new food shock window under the IMF’s emergency financing facilities to help address the food crisis facing the most vulnerable members.

*Launch of the IMF’s Regional Economic Outlook for the Middle East and North Africa, Dubai International Financial Centre, Dubai, United Arab Emirates, October 31, 2022 — Press Remarks by Jihad Azour, Director, Middle East and Central Asia Department, International Monetary Fund.*

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_Source: https://www.imf.org/-/media/files/publications/reo/mcd-cca/2022/october/english/eng-press.pdf_