{
  "title": "Transcript of the October 2022 Middle East and Central Asia Department Press Briefing",
  "publication": "IMF News, October 13, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing",
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  "summary": "Transcript of the October 2022 Middle East and Central Asia Department Press Briefing",
  "publishDate": "2022-10-13",
  "sections": [
    {
      "heading": "Regional growth outlook — MENA",
      "content": "- The region will grow at 5 percent this year, up from 4.1 percent in 2021.\n- Growth is projected to slow to 3.6 percent next year.\n- Oil exporters: growth projected at 5.2 percent this year, with an expected slowdown next year as \"OPEC-plus production cuts, and oil price decline, and global demand is expected to slow.\"\n- Emerging market and middle-income economies:\n  - Real GDP foreseen to grow at 4.9 percent this year, up from 3.6 percent last year.\n  - Growth expected to slow to 3.9 percent in 2023.\n  - These economies are facing a deep terms-of-trade shock, weakening global demand, and tighter financial conditions that \"could translate into higher government service debt and worsening of debt dynamics.\"\n- Low-income countries: growth will remain weak at just 0.8 percent this year."
    },
    {
      "heading": "Regional inflation — MENA",
      "content": "- Headline inflation in MENA is projected at 14.2 percent, on average, for this year, and is \"expected to remain elevated in 2023.\"\n- Inflation \"continued to increase and has become now broad-based.\""
    },
    {
      "heading": "Caucasus and Central Asia (CCA) — outlook and inflation",
      "content": "- CCA growth for 2022 revised up by 1.2 percentage points to 3.8 percent this year (relative to April forecast).\n- Growth drivers: \"smaller than expected contraction in Russia, robust foreign exchange inflows, as well as resilient trade.\"\n- Medium-term growth projected to slow to 3.5 percent, \"significantly below the region’s historical average of almost 7 percent.\"\n- Headline inflation projected at 12.9 percent this year, and 10.5 percent in 2023, despite recent monetary policy tightening."
    },
    {
      "heading": "Key risks highlighted",
      "content": "- Persistently high commodity prices and pervasive food shortages, with \"low strategic food reserves\" and rising fertilizer costs risking 2023 agricultural harvests, reducing food security and potentially raising social tensions.\n- Tighter-than-expected global financial conditions that could trigger financial instability and debt distress.\n- Broadening inflation that may require deeper disinflationary policies with potentially higher-than-expected costs.\n- Continued high uncertainty from the war in Ukraine, with spillovers to trade, tourism, remittances, and financial channels."
    },
    {
      "heading": "Policy priorities and recommendations",
      "content": "- Restore price stability while protecting the vulnerable.\n- Preserve fiscal sustainability while maintaining social stability.\n- Ensure food and energy security and manage lingering pandemic-related risks.\n- Press ahead with structural reforms to bolster growth, diversify and transform economies, improve resilience and sustainability, and increase inclusiveness.\n- Enhance social protection systems by targeting support to the most vulnerable rather than untargeted subsidies.\n- Give space to the private sector to drive investment and job creation; state should support rather than compete with private activity.\n- Monetary policy, fiscal discipline, and strengthened social protection are emphasized as central pillars of programs."
    },
    {
      "heading": "Country-specific notes and IMF engagement",
      "content": "- Egypt:\n  - IMF–Egypt cooperation described as \"very strong\" since 2016 with two prior programs and a social protection pillar.\n  - During COVID the Fund provided two tranches totaling $8.8 billion.\n  - Negotiations for a new program have started and are \"progressing\"; \"as soon as we reach staff level agreement, we will inform you about the size and the content of this agreement.\"\n  - Program pillars: protecting from exogenous shocks, adapting monetary policy, maintaining fiscal discipline, strengthening social protection (Takaful and Karama), and structural reforms to boost private-sector-led growth.\n- Tunisia:\n  - IMF provided one and a half billion dollars over the last two years: \"750 immediately after the COVID shock, and another one of similar amount, last year, with the SDR allocations.\"\n  - Negotiations for a new program are ongoing; the program \"is a homegrown program\" with social dialogue and prioritization of reforms to address fiscal imbalances and inflation.\n  - Central bank measures (interest rate adjustments and liquidity provision) noted as part of addressing inflation.\n- Qatar:\n  - Economic activity benefited from World Cup-related investment and higher oil and gas prices; expected continued improvement in growth next year.\n  - GCC countries generally have lower inflation impacts due to consumption patterns and continued subsidies for some commodities.\n  - Qatar expected to increase gas production and remain a leading LNG exporter.\n- Somalia:\n  - Reached HIPC decision point in 2020; work toward the completion point continues.\n  - Challenges include COVID, climate shocks (droughts and floods), and delayed political processes.\n  - IMF recommends more grants to address acute food security needs.\n  - Expectation to reach completion point \"some time at end of 2023\" if progress continues.\n- Sudan:\n  - IMF engagement not suspended; limited engagement continues.\n  - Economic and social situation has deteriorated; ECF expected to expire at the end of 2022.\n  - HIPC decision point achieved; completion point still requires reforms and measures amid food security and climate shocks.\n- Lebanon:\n  - Staff-level agreement reached after protracted negotiations to address \"one of the most acute and severe crisis for Lebanon in a century.\"\n  - Key required measures: pass a budget; restore trust and confidence via transparency and anti-corruption measures (e.g., Bank Secrecy Law reforms); address financial sector losses that weigh on the state balance sheet.\n  - Progress has been made but remains slow; IMF urges acceleration to enable program effectiveness and international support.\n- Jordan:\n  - Program adjusted since 2020 to provide flexibility during COVID.\n  - Implemented important reforms to maintain macro stability and control inflation.\n  - Priorities: accelerate structural reforms, reduce labor and energy costs, improve fiscal management, and undertake transformative projects to reduce unemployment and boost private-sector-led growth.\n- Pakistan:\n  - IMF has an extended program and recently completed a review that provided $1.2 billion.\n  - IMF awaiting World Bank and UNDP assessments of flood damages to update economic and fiscal implications.\n  - IMF encourages moving from untargeted subsidies to targeted social protection to better protect vulnerable populations.\n  - Mission expected in November to prepare the next review."
    },
    {
      "heading": "IMF financing and support in the region",
      "content": "- Since the outbreak of the COVID crisis, the IMF has supported MENA and CCA, plus Afghanistan and Pakistan, with US$21.3 billion in financing.\n- In 2021, the SDR allocation provided an additional boost to reserves by US$49 billion.\n- The IMF is scaling up technical assistance and policy advice for MENA and CCA, including a new center in Kazakhstan.\n- Regional Economic Outlook (REO) launch events: \"we’ll explore the outlook\" at the REO launch in Dubai later this month and in Uzbekistan in early November.\n- The Regional Economic Outlook report will be published on October 31st.\n\nTranscript of the October 2022 Middle East and Central Asia Department Press Briefing\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/jihad-azour\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing"
    }
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    "Published: October 13, 2022",
    "The region will grow at 5 percent this year, up from 4.1 percent in 2021.",
    "Growth is projected to slow to 3.6 percent next year.",
    "Oil exporters: growth projected at 5.2 percent this year, with an expected slowdown next year as \"OPEC-plus production cuts, and oil price decline, and global demand is expected to slow.\"",
    "Emerging market and middle-income economies:",
    "Low-income countries: growth will remain weak at just 0.8 percent this year.",
    "Headline inflation in MENA is projected at 14.2 percent, on average, for this year, and is \"expected to remain elevated in 2023.\"",
    "Inflation \"continued to increase and has become now broad-based.\"",
    "CCA growth for 2022 revised up by 1.2 percentage points to 3.8 percent this year (relative to April forecast).",
    "Growth drivers: \"smaller than expected contraction in Russia, robust foreign exchange inflows, as well as resilient trade.\"",
    "Medium-term growth projected to slow to 3.5 percent, \"significantly below the region’s historical average of almost 7 percent.\"",
    "Headline inflation projected at 12.9 percent this year, and 10.5 percent in 2023, despite recent monetary policy tightening.",
    "Persistently high commodity prices and pervasive food shortages, with \"low strategic food reserves\" and rising fertilizer costs risking 2023 agricultural harvests, reducing food security and potentially raising social tensions.",
    "Tighter-than-expected global financial conditions that could trigger financial instability and debt distress.",
    "Broadening inflation that may require deeper disinflationary policies with potentially higher-than-expected costs.",
    "Continued high uncertainty from the war in Ukraine, with spillovers to trade, tourism, remittances, and financial channels.",
    "Restore price stability while protecting the vulnerable.",
    "Preserve fiscal sustainability while maintaining social stability.",
    "Ensure food and energy security and manage lingering pandemic-related risks.",
    "Press ahead with structural reforms to bolster growth, diversify and transform economies, improve resilience and sustainability, and increase inclusiveness.",
    "Enhance social protection systems by targeting support to the most vulnerable rather than untargeted subsidies.",
    "Give space to the private sector to drive investment and job creation; state should support rather than compete with private activity.",
    "Monetary policy, fiscal discipline, and strengthened social protection are emphasized as central pillars of programs.",
    "Egypt:",
    "Tunisia:",
    "Qatar:",
    "Somalia:",
    "Sudan:",
    "Lebanon:",
    "Jordan:",
    "Pakistan:",
    "Since the outbreak of the COVID crisis, the IMF has supported MENA and CCA, plus Afghanistan and Pakistan, with US$21.3 billion in financing.",
    "In 2021, the SDR allocation provided an additional boost to reserves by US$49 billion.",
    "The IMF is scaling up technical assistance and policy advice for MENA and CCA, including a new center in Kazakhstan.",
    "Regional Economic Outlook (REO) launch events: \"we’ll explore the outlook\" at the REO launch in Dubai later this month and in Uzbekistan in early November.",
    "The Regional Economic Outlook report will be published on October 31st.",
    "[https://www.imf.org/en/about/senior-officials/bios/jihad-azour](https://www.imf.org/en/about/senior-officials/bios/jihad-azour)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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