|[Published: Wednesday October 21 2020]
World Bank sees 5.2% economic hit in MENA due to coronavirus
WASHINGTON, 21 Oct. - (ANA) - The World Bank anticipates that economies in the Middle East and North Africa will contract more deeply than initially estimated, fuelled by the double burden of lower crude prices and the spread of Covid-19.
The global lender revised its estimate to a 5.2 percent shrinkage this year versus an April forecast of a 1.1 percent contraction, according to its updated regional economic outlook published Sunday.
The outlook is in line with that of the International Monetary Fund, which last week predicted gross domestic product would contract five percent in 2020.
Even before this year’s crises, “the loss of potential growth because of the lack of transparency, lack of governance and the very heavy role of the state” had dragged the region’s economies downward, Ferid Belhaj, the bank’s vice president for MENA, said in an interview.
The dual shock of lower Brent prices and the coronavirus pandemic this year has taken an especially heavy toll on the region, home to the world’s largest crude exporters.
MENA’s 2020 current-account deficit is forecast at 4.8 percent of GDP, versus a one percent shortfall in October 2019. The fiscal deficit is seen at 10 percent of GDP, from 4.7 percent.
Around the world, nations have had to halt their economies to contain the spread of Covid-19, while injecting stimulus directly and indirectly. Virus cases are spiking again in many regions, and countries including the UK, Italy and France are considering re-imposing lockdowns, fuelling concerns about a further economic downturn and more uncertainty.
The World Bank’s revision this year reflects “an increasingly pessimistic outlook for the regional economy,” according to the report. “The region is expected to recover only partially in 2021.” - (ANA) -
AB/ANA/21 October 2020 - - -