As per the IMF’s World Economic Outlook Update, growth projections for 2022 and 2023, Saudi Arabia, the Arab world’s largest economy and leading exporter of crude oil, has led the Middle East and Central Asia.
The kingdom is forecast to grow 7.6% after expanding 3.2% last year. The IMF estimates Saudi Arabia’s growth to reach 3.7% in 2023.
An IMF report noted the Middle East’s need for fairer taxes to aid growth and ease inequality. The paper analyzes the challenges and opportunities of raising more tax revenue in the Middle East and Central Asia. It provides new estimates of the additional revenue magnitudes that could improve growth prospects and social inclusion: the difference between actual and potential tax collection equals about 14% of GDP (excluding oil and gas), on average. The report notes that there is scope for governments to raise more revenue by bringing tax ratios closer to the levels that they could achieve, given their economic structures.
Overall, the IMF’s forecast points to global inflation, which has been revised due to food and energy prices and lingering supply-demand imbalances. This year, it is anticipated to reach 6.6% in advanced economies and 9.5% in emerging and developing economies—upward revisions of 0.9% and 0.8% points, respectively. In 2023, disinflationary monetary policy is expected to bite, with global output growing by just 2.9%.
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