Middle East And Africa Struggle To Shake Off Economic Effects Of Coronavirus Pandemic – Forbes

Ships at the entrance of the Suez Canal, Egypt on March 29, while work continued to free the Ever ... [+] Given container ship which ran aground in the canal on March 23 (Photo: Mahmoud Khaled/Getty Images)

The Middle East and Africa are set to be the laggards when it comes to economic growth this year, according to the latest forecasts by the International Monetary Fund (IMF).

In its World Economic Outlook report, released earlier today, the Washington D.C.-based organisation said the global economy should grow by 6% this year, following a 3.3% contraction in 2020.

Asian economies are set to lead the way, with growth of 8.6% across the region. The U.S. is also expected to perform strongly, with 6.4% growth. Latin America and the Caribbean are expected to expand by 4.6%, while the Euro area will grow by 4.4%. However, the Middle East and Central Asia region is expected to grow by 3.7%, while sub-Saharan Africa will post a growth rate of just 3.4%.

Gita Gopinath, director of the IMFs research department, said in a blog post that the IMF was now projecting a stronger recovery for the global economy compared with its January forecast, helped by the rollout of vaccines this year, the evolution of new ways of working and large financial commitments by some governments, notably the U.S.

Last year, only 27 countries posted any economic growth, as the coronavirus pandemic led to lockdowns and recessions. This year, almost everywhere will rebound to some extent. Only 14 countries are expected to see their economies contract further this year mostly small island states in the Caribbean or the Pacific, as well as Myanmar which is suffering from an increasingly brutal military coup.

The benefits of the rebound this year are not being evenly spread in other parts of the world though. The upgrades the IMF has made to its global growth projections are mainly due to improvements among advanced economies, including the U.S. and the eurozone countries. Low-income and emerging economies are expected to face greater difficulties, with larger losses in per capita GDP. These divergent recovery paths are likely to create wider gaps in living standards across countries compared to pre-pandemic expectations, wrote Gopinath.

This trend is true within regions as well as on the global level, with the outlook for individual economies dependent on factors including the severity of the pandemic, the success of vaccine rollout programmes, dependence on tourism, oil price developments and the varying ability of governments to enact policies to support their economies and societies.

The IMF report notes that, within the Middle East, countries that started vaccinations early on, such as the affluent Gulf Cooperation Council countries, face relatively better prospects, while fragile and conflict-affected states have seen their outlook darken. Among sub-Saharan African countries, it says that tourism-reliant economies will likely be worst affected.

International Monetary Fund chief economist Gita Gopinath speaking at a virtual press briefing in ... [+] Washington D.C. on October 13, 2020, on the release of a previous edition of the World Economic Outlook report. Photo: Xinhua/Liu Jie via Getty Images

Read more:

Middle East And Africa Struggle To Shake Off Economic Effects Of Coronavirus Pandemic - Forbes