Ukraine War to Curb Central Asian Economy, Oil Cushions Middle East, Says IMF

Ukraine War to Curb Central Asian Economy, Oil Cushions Middle East, Says IMF

The war in Ukraine will sharply reduce economic growth in the Central Asian region in 2022, although higher oil prices will lessen the impact for the Middle East and North Africa, the International Monetary Fund said on Wednesday.

Both regions will still feel the effect of surging commodity prices, and higher wheat prices alone could increase the Middle East and Central Asia's combined external financing needs by up to $10 billion, the IMF said.

"The war in Ukraine will be the dominant factor shaping the outlook, compounding global headwinds from faster-than-expected normalization of monetary policy in advanced economies, China's slowdown and a lingering pandemic," it said.

IMF Middle East and Central Asia Director Jihad Azour told a news conference that low income countries in the region would be hardest hit because of their limited reserves and their dependence on wheat from Ukraine and Russia.

The IMF classifies Afghanistan, Djibouti, Kyrgyzstan, Mauritainia, Somalia, Sudan, Tajikistan, Uzbekistan and Yemen as low income countries in its Middle East and Central Asia region.

Azour said the region's countries face higher food costs ranging from 0.3% of GDP to 1.5% of GDP.

The IMF has loan programs with many countries in the region, he said, and that it allowed adjustments at