IMF Warns On Rising Debt Risks in Middle East, Central Asia

IMF Warns On Rising Debt Risks in Middle East, Central Asia

Jihad Azour, the IMF's Director of the Middle East and Central Asia, speaks during interview with Reuters television in Beirut. (Reuters)

The International Monetary Fund said on Sunday countries in the Middle East and Central Asia need to curb their financing requirements, as a surge in government debt, exacerbated by the pandemic, threatens recovery prospects.

The region, which includes around 30 countries from Mauritania in the west to Kazakhstan in the east, saw an economic rebound in the third quarter as countries relaxed measures to contain the novel coronavirus.

But the outlook remains highly uncertain and recovery paths will diverge depending on the speed of vaccinations, reliance on heavily impacted sectors, such as tourism, and countries' fiscal policy.

"Recovery has started, but recovery has started in an uneven, uncertain way,“ said Jihad Azour, director of the Middle East and Central Asia Department at the IMF.

"The outlook is uncertain because the legacies of the pre-COVID-19 are still there, especially for countries who have high levels of debt.“

The Fund said "early inoculators,“ which include the oil-rich Gulf countries, Kazakhstan and Morocco, will reach 2019 gross domestic product (GDP) levels next year, while recovery to those levels is expected to take one year more for other countries,