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The new Corona virus pandemic has pushed almost all Middle Eastern countries into an economic recession this year, but some recovery is expected as all Middle Eastern countries except two countries, Lebanon and Oman, are expected to experience a level of economic growth next year, according to a report from the Fund. International monetary, Monday.
This comes at a time when the International Monetary Fund estimates that the world economy will contract by 4.4 percent this year, the worst annual decline since the Great Depression in the 1930s.
Long before the coronavirus spread around the world, many countries in the Middle East were struggling with problems ranging from low oil prices to slowing economic growth, corruption and high unemployment.
Lebanon
The International Monetary Fund expects the Lebanese economy to experience one of the largest economic recessions in the region this year, at 25 percent.
The epidemic only brought the country to the brink after a wave of anger at the government before the virus spread.
Lebanese protest against government corruption, foreign exchange shortages, hyperinflation, constant power outages, and growing poverty. The currency is down 70 percent compared to the end of last year, as people struggle to buy commodities.
Furthermore, a devastating explosion in Beirut’s main port last August killed at least 180 people, injured more than 6,000 and destroyed entire neighborhoods. The explosion left hundreds of thousands of people homeless.
The International Monetary Fund warned that “the worst-case risks are expected to be great, especially given the recent increases in Covid-19 cases in many countries around the world that have reopened.”
Iran
Iran, for example, recorded its highest daily death toll from the virus last week. Its economy contracted 6.5 percent last year and is expected to contract another 5 percent this year.
However, the International Monetary Fund expects Iran’s economy to rebound by 3.2 percent next year, in part due to the future government’s ability to handle the virus crisis, which it has struggled through so far.
The Director of the Middle East and Central Asia Department of the International Monetary Fund, Jihad Azour, said: “Iran was one of the first countries to become a hotbed of the Corona virus, and now we are in the third wave of the epidemic, especially to the light of an economy that has performed poorly due to US sanctions. “
Oil exporters
Meanwhile, the IMF said wealthy Middle East oil exporters are expected to see their economies shrink 6.6 percent in 2020.
However, the Gulf states are expected to witness an economic growth rate of 2.3 percent next year.
The Fund said it based its forecasts on assumptions that the median oil price reached $ 41.69 per barrel in 2020 and that it will rise to $ 46.70 per barrel in 2021.
Saudi
The IMF revised its grim estimate of the economic contraction in Saudi Arabia from 6.8 percent to 5.4 percent, as it is one of the world’s largest oil producers and one of the 20 largest economies.
The kingdom took a bold step this year by trying to increase revenue by raising the value-added tax three times to 15 percent and increasing tariffs.
Egypt
Egypt was the only different country in the region, seeing a modest 3.5% growth this year after growing more than 5% annually for the past two years, helped by lower energy prices as an oil importer. .
However, Egypt continues to face challenges with its huge population and tourism receipts remain stagnant.
Emirates and Iraq
Meanwhile, other oil-exporting countries in the Middle East, such as the United Arab Emirates, will experience an economic contraction of more than 6% this year, while Oman’s economy is expected to contract by 10%. The fund said Iraq is facing a 12% recession.
Poverty and working hours
The World Bank estimates that the pandemic has caused between 88 and 114 million people to fall into extreme poverty, which is defined as living on less than $ 1.90 a day.
For its part, the International Labor Organization said that the working day in Arab countries decreased by 1.8 percent during the first quarter of 2020, equivalent to about one million full-time jobs.
That number jumped to 10.3 percent in the second quarter of the year, equivalent to about 6 million full-time jobs.
