## Transcript of the October 2022 Middle East and Central Asia Department Press Briefing _IMF News, October 13, 2022_ ## Source details **Canonical URL:** [Transcript of the October 2022 Middle East and Central Asia Department Press Briefing](https://www.imf.org/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing) ## Other formats - [Markdown version](/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing/index.md) - [Structured JSON version](/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing/index.json) - [Bundle manifest](/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing/bundle-manifest.json) ## Bibliographic details - Published: October 13, 2022 --- ### Regional growth outlook — MENA - 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: - Real GDP foreseen to grow at 4.9 percent this year, up from 3.6 percent last year. - Growth expected to slow to 3.9 percent in 2023. - 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." - Low-income countries: growth will remain weak at just 0.8 percent this year. ### Regional inflation — MENA - 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." ### Caucasus and Central Asia (CCA) — outlook and inflation - 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. ### Key risks highlighted - 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. ### Policy priorities and recommendations - 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. ### Country-specific notes and IMF engagement - Egypt: - IMF–Egypt cooperation described as "very strong" since 2016 with two prior programs and a social protection pillar. - During COVID the Fund provided two tranches totaling $8.8 billion. - 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." - 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. - Tunisia: - 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." - 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. - Central bank measures (interest rate adjustments and liquidity provision) noted as part of addressing inflation. - Qatar: - Economic activity benefited from World Cup-related investment and higher oil and gas prices; expected continued improvement in growth next year. - GCC countries generally have lower inflation impacts due to consumption patterns and continued subsidies for some commodities. - Qatar expected to increase gas production and remain a leading LNG exporter. - Somalia: - Reached HIPC decision point in 2020; work toward the completion point continues. - Challenges include COVID, climate shocks (droughts and floods), and delayed political processes. - IMF recommends more grants to address acute food security needs. - Expectation to reach completion point "some time at end of 2023" if progress continues. - Sudan: - IMF engagement not suspended; limited engagement continues. - Economic and social situation has deteriorated; ECF expected to expire at the end of 2022. - HIPC decision point achieved; completion point still requires reforms and measures amid food security and climate shocks. - Lebanon: - Staff-level agreement reached after protracted negotiations to address "one of the most acute and severe crisis for Lebanon in a century." - 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. - Progress has been made but remains slow; IMF urges acceleration to enable program effectiveness and international support. - Jordan: - Program adjusted since 2020 to provide flexibility during COVID. - Implemented important reforms to maintain macro stability and control inflation. - 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. - Pakistan: - IMF has an extended program and recently completed a review that provided $1.2 billion. - IMF awaiting World Bank and UNDP assessments of flood damages to update economic and fiscal implications. - IMF encourages moving from untargeted subsidies to targeted social protection to better protect vulnerable populations. - Mission expected in November to prepare the next review. ### IMF financing and support in the region - 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. *Transcript of the October 2022 Middle East and Central Asia Department Press Briefing* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing_