Kristina Georgieva, the managing director of the International Monetary Fund (IMF), spoke at the World Governments Summit in Dubai on 11 February about the resilience of the global economy despite several challenges. Georgieva discussed how short-term oil production cuts, the Israel-Gaza conflict, and tight monetary policies in the Middle East have affected neighboring economies. She noted that while growth exceeded expectations in 2023, any further widening of the Israel-Gaza conflict could worsen economic situations for countries still recovering from previous shocks.
Georgieva also pointed out that declining oil demand will become an increasingly challenging issue over the medium term for net energy importers, who are already limited by historically high debt and borrowing needs and limited access to external financing. The IMF expects 2024 GDP growth for the Middle East and North Africa (MENA) region to reach 2.9%, down from 3.4% previously. However, despite this decline, Georgieva suggested that eliminating regressive energy subsidies would discourage pollution and help improve social spending.
In addition to these comments, Georgieva also mentioned that a paper published by the IMF on February 12 would recommend gradual energy subsidy reforms for the Middle East. This recommendation could save $336bn in the region, equivalent to the economies of Iraq and Libya combined.