On Monday, June 10, the Rafik Hariri Center for the Middle East hosted a public discussion on the economic challenges facing the region.
Hariri Center Deputy Director Tuqa Nusairat welcomed guests and framed the discussion. Dr. Jihad Azour, director of the Middle East and Central Asia department at the International Monetary Fund, then presented the findings of the IMF’s 2019 Regional Economic Outlook (REO) for the Middle East, North Africa, Afghanistan, and Pakistan. Dr. Azour emphasized four major factors impacting the region’s economics: slowed global growth (projected to drop from 3.6 to 3.3 percent this year); lower and more volatile oil prices; lower external demand, particularly from key trading partners (China, Europe, and Russia); and uncertain global financial conditions. Slow progress in improving employment rates since 2011 has fueled rising discontent as well as hindered growth. Dr. Azour outlined several fiscal and structural policy recommendations for both oil-exporting and oil-importing countries in the region. He advised that the former resume gradual consolidation, insulate the economy from oil shocks, strengthen fiscal institutions, improve business environment and governance, increase SME access to finance, and invest in human and physical capital. He advised that the latter also pursue growth-friendly consolidation, initiate targeted social transfers and restructuring and digitization of SOEs, increase exchange rate flexibility, improve access to credit and the business environment, and undertake product and labor market reforms.