Thirty countries in the region have seen economic recovery, but the outlook remains uncertain due to the epidemic.
The International Monetary Fund (IMF) has said that the rise in government debt caused by the coronavirus epidemic should prevent countries in the Middle East and Central Asia from financing their finances, threatening the possibility of recovery.
The region has seen economic recovery in the third quarter, covering about 30 countries, from Mauritania to Kazakhstan, as the country relaxes its control over the new coronavirus.
The outlook, however, remains highly uncertain and recovery paths will depend on the speed of vaccines, heavily affected sectors such as tourism and the monetary policy of countries.
“Recovery has begun, but unevenly, indefinitely,” Jihad Azur, director of the IMF’s Middle East and Central Asia division, told Reuters.
“The outlook is uncertain because the pre-Covid 19 predecessors are still there, especially for countries with high levels.”
The IMF says the “primary inoculators”, which include oil-rich Gulf countries, Kazakhstan, and Morocco, will reach gross domestic product (GDP) levels by 2019 next year, and that recovery is expected to take another year for other countries. .
The Washington-based global lender said in an update of its regional and economic outlook that “high funding requirements may limit the scope of policies needed to support recovery.”
Low demand and falling commodity prices wasted state money last year.
In the Middle East and North Africa, the fiscal deficit widened from 3.8 percent in 2019 to 10.1 percent of GDP in 2020.
The crisis has led many countries to increase debt, partly to the benefit of greater liquidity in the world market, to bear the additional costs of mitigating the effects of the epidemic.
The IMF warns that financial needs are expected to increase in the next two years, with emerging markets in the region hitting 2021-22-201 during 2011-19-1. About ১ 1.1 trillion could be needed from $ 74 billion a year.
It presents financial stability risks and can slow economic recovery. Many countries rely on domestic banks to fund sovereign needs, which may make credit less easily available to corporations and small enterprises.
Higher externalized countries have become more vulnerable to further strengthening of the global financial situation, which will further increase their costs and prevent access to the market.