The 2024 growth projection for the Middle East and North Africa (MENA) region is revised downward by 0.5% from October forecasts, according to the January 2024 Regional Economic Outlook Update, issued by the International Monetary Fund on Wednesday, titled 'Middle East and North Africa: Conflict Compounding Economic Challenges.' The IMF now projects GDP to grow by 2.9% in 2024 from 'already weak growth of 2.0% in 2023,' down from forecasts of 3.4%. According to the report, various factors are weighing on economic activity, notably the conflict in Gaza. Neighbouring countries-Egypt, Lebanon, and Jordan-also face a challenging outlook. In addition, the heightened security situation in the Red Sea has raised new concerns about the conflict's impact on trade and shipping costs. Decisions by several oil-exporting countries to cut oil production are constraining GDP growth overall, especially in the Gulf Cooperation Council (GCC) countries, even though non-oil activities remain dynamic, the report specifies. T he IMF emphasises the importance of implementing tight policy settings to reduce high levels of debt and significant inflation in certain countries. Regarding inflation, the report highlights its ongoing decline in most MENA economies in line with global trends, except in some parts of the region due to country-specific challenges. In terms of risks, the IMF underscores that uncertainty levels and downside risks have significantly increased in the region since last October, given the unpredictable duration and potential expansion of the conflict. "Should the conflict escalate, a more severe or persistent negative impact on tourism could materialise," reveals the report. Concerning the policy response of public authorities, the IMF indicates that the appropriate response from decision-makers will depend on the countries' exposure to the conflict, existing vulnerabilities, and policy space. Where the impact of the conflict is acute or risks are elevated, crisis management and precautionary policies will be crucial. Structural reforms to boost growth and strengthen resilience in both the near and longer terms remain critical, the report concludes. Source: Agence Tunis Afrique Presse