Coronavirus: IMF calls for ‘urgent’ action in MENA as virus hits oil, growth
The International Monetary Fund called for urgent action from Middle East governments on Tuesday as the coronavirus pandemic threatens a persistent slump in oil revenues and a "big drop" in growth. The IMF added that a dozen Middle East and North African (MENA) countries had already approached it for financial support.
It urged governments across the region to swiftly draw up rescue packages to head off a protracted recession. “The region is likely to see a big drop in growth this year,” the IMF's regional director for the Middle East and Central Asia, Jihad Azour, said in a report.
The IMF had already substantially cut its growth projections for the region over low oil prices, civil unrest and US sanctions against Iran.
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The coronavirus pandemic has triggered a 50 percent fall in oil prices that has slashed government revenues across the region.
Coronavirus causes economic turmoil
“The coronavirus pandemic has become the largest near-term challenge to the region,” Azour said.
”The pandemic is causing significant economic turmoil in the region through simultaneous shocks -- a drop in domestic and external demand, a reduction in trade, disruption of production, a fall in consumer confidence, and tightening of financial conditions.”
The coronavirus shutdown is hurting sectors that are major sources of employment like tourism, hospitality and retail, with rising joblessness and falling wages the likely results, he said.
IMF chief Kristalina Georgieva said on Monday that world economic growth would be negative this year and could be worse than the 2008 global financial crisis, further sapping demand for Middle East oil.