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IMF projects 2.9% growth for the Middle East in 2024

Saudi Arabia's temporary oil production cuts behind the downward revision.

IMF projects 2.9% growth for the Middle East in 2024
[Source photo: Anvita Gupta/Fast Company Middle East]

Across the Middle East, growth is expected to remain subdued this year due to the combined effects of global headwinds, domestic challenges, and geopolitical risks weighing on economic momentum.

According to the latest World Economic Outlook from the International Monetary Fund (IMF), Middle East region growth is projected to be 2.9% in 2024 and a robust 4.2% in 2025.

The IMF slashed the region’s growth forecast by 0.5% for 2024 but revised it upward by 0.3 % for next year.

Saudi Arabia’s temporary oil production cuts, both unilateral and through OPEC+, are behind the downward revision for 2024 in the region. However, non-oil growth is expected to remain strong, providing a solid foundation for the upward trajectory in the following year.

Central banks in the Middle East face difficult trade-offs and policy challenges at a time when core inflation, though gradually declining, remains above central bank targets in many countries. 

In this context, a prolonged period of tighter monetary policy to reduce inflation could have unintended consequences for financial systems in the region.

Global growth, estimated at 3.1% in 2023, is projected to remain at 3.1 percent in 2024 before rising modestly to 3.2% in 2025.

The projection for global growth in 2024 and 2025 is below the historical (2000–19) annual average of 3.8%, reflecting restrictive monetary policies, withdrawal of fiscal support, and low underlying productivity growth.

Global trade growth is also expected to remain below its historical average, weighed down by rising trade restrictions and geopolitical fragmentation.

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