Tunisia is the first country in the Middle East and North Africa (MENA) region to receive an emergency financing of US$745 million to support its fight against the covid-19 pandemic , Said International Monetary Fund (IMF) Middle East and Central Asia Department Director Jihad Azour.
Speaking at a press conference held Wednesday as the MENA report was released, Azour said the region was affected by a dual shock which caused a drop in external demand.
“Confinement and night curfew drove demand in tourism and retail sale down, ” he said.
The sharp drop in oil prices since early 2020 worsened the situation in the region, particularly for oil-exporting countries. Major producers were hit hard by falling prices and the decreasing demand for petroleum derived products.
Azour also shed ligh on the complicated financial situation on the world market which caused the outflow of capitals from emerging countries and made challenges facing the region evern harder.
The countries of the region mobilised very quickly to face the crisis by protecting people’s lives, developing health infrastructures, increasing spending while announcing financial measures representing an average 3.8% of their GDP, he added. Central banks likewise adopted policies to support liquidity.
“In the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) , the IMF projects that the economy would contract by 3.1 percent in 2020 against a 0.7% growth in 2019,” said Azour.
Oil exporting countries are also facing a 4.2% recession, while importers are expected to post a 1% decline.
Growth in the region is forecast to reach 2.2% in 2020 compared to 6.2% in 2019, he said.
Azour said governments need to save people’s lives, mobilise necessary funds for healthcare and put in place financial and monetary policies to deal with the crisis.
These policies are intended to put the economy on a path to sustainable growth.once the COVID-19 crisis is overcome, he said.