Arab economies will not recover until the end of 2022

The director of the International Monetary Fund, Kristalina Georgieva, explained that data received by the IMF from different countries indicates a slowdown in the dynamics of economies, as the epidemic is still spreading. The International Monetary Fund has estimated the losses of Arab countries due to the repercussions of the Corona pandemic at more than 900 billion dollars until 2025, compared to the performance of these economies before the pandemic. In a recent report, the International Monetary Fund attributed the reason for these losses to the dual effect of declining oil demand and the impact of the tourism and trade sectors due to the closures that prevailed.

The Director of the International Monetary Fund, Kristalina Georgieva, had predicted, during her recent participation in the Fifth Forum of Public Finances in the Arab Countries, that the economies of the Arab countries would register a contraction of about 5% this year and that growth would slow down. would recover by around 3.2% in the year 2021. He stressed that Arab countries will not restore the GDP rates achieved in 2019 before the end of 2022, indicating that the path of economic recovery will be long, difficult and prone to setbacks.

The International Finance Corporation has called on Arab countries to focus on recovering from the virus, warning that the implications for medium-term economies could be profound. The fund has identified several factors that may hinder the recovery of the economies of the Arab region, among which the service sector has been greatly affected, the deterioration of company balance sheets, the decrease in the ability to work from home and the dependence on remittances. In this context, Georgieva discussed the financial packages and liquidity support plans adopted by Arab countries to protect income and livelihoods and strengthen the financial sector. Innovative measures included tax deferrals and other administrative measures, as well as cash transfers and support schemes for small and medium-sized enterprises. She called on Arab policymakers to work to increase revenues in the medium term, noting increased tax compliance, progressive taxation and support for revenue management that help ensure governments continue to respond to the impact of the epidemic. on savings.