Growth in MENA region to reach 2.2% in 2024 (IMF World Economic Outlook)

Growth in the Middle East and North Africa (MENA) region is expected to rise from 1.8% in 2023 to 2.2% in 2024 and 4% in 2025, reads the International Monetary Fund (IMF)'s latest World Economic Outlook Update.These data have been revised downward compared with those announced last April, which predicted growth of 2.7% in 2024 and 4.2% in 2025, the report reads.Global growth to be in line with April 2024 WEO forecastGlobal growth is projected to be in line with the April 2024 World Economic Outlook (WEO) forecast, at 3.2% in 2024 and 3.3% in 2025.However, varied momentum in activity at the turn of the year has somewhat narrowed the output divergence across economies as cyclical factors wane and activity becomes better aligned with its potential.Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalization. Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty.To manage these risks and preserve growth, the policy mix should be sequenced carefully to achieve price stability and replenish diminished buffers.Trade makes recoveryWorld trade growth is expected to recover to about 3.25% annually in 2024-25 (from quasi stagnation in 2023) and align with global GDP growth again.The uptick in Q1 of this year is expected to moderate as manufacturing remains subdued. Although crossborder trade restrictions have surged, harming trade between geopolitically distant blocs, the global trade-to-GDP ratio is expected to remain stable in the projection.Global inflation to continue to declineIn advanced economies, the revised forecast is for the pace of disinflation to slow in 2024 and 2025. That is because inflation in prices for services is now expected to be more persistent and commodity prices higher.However, the gradual cooling of labor markets, together with an expected decline in energy prices, should bring headline inflation back to target by the end of 2025.Inflation is expected to remain higher in emerging market and developing economies (and to drop more slowly) than in advanced economies.Source: Agence Tunis Afrique Presse