Director of the International Monetary Fund, global inflation will decline to 66 in 2023

Kristina Georgieva, Managing Director of the International Monetary Fund, stressed that global growth is still weak, but it may be witnessing a turning point at the present time And she added during her speech, today, at the Seventh Public Finance Forum in the Arab Countries within the activities of the introductory day for the World Government Summit 2023: After growth rose by 3.

4% last year, we see it currently declining to 2 9% during 2023, to record a slight improvement.

In 2024, It Will Reach 3 1%

The Fund had announced the latest forecasts two weeks ago, which, although less gloomy compared to October, still indicates a decline in growth, and fighting inflation remains a priority in 2023 And she continued: On the positive side, we are currently witnessing a decline in inflation from 8.

8% In 2022 To 6

6% this year and 4 3% in 2024 - though it will still be well above pre-pandemic levels in most countries.

Helping factors include the reopening of China, the resilience of labor markets and consumer spending in the United States and the European Union And she added: While the picture appears promising, negative developments are still the outweighing balance in the balance of risks.

China's recovery could be stalled Inflation may still exceed expectations, necessitating further monetary tightening - which could lead to sudden repricings in financial markets.

With the global economy slowing, she said, growth in the Middle East and North Africa region is also expected to decline - from 5 4 percent in 2022 to 3.

2 percent this year, before rising to 3 5 percent in 2024.

In oil-exporting countries, Reducing production in accordance with the OPEC + agreement may lead to a decline in overall oil revenues Challenges will continue in oil-importing countries.

Public debt is a major concern, as several economies in the region are facing rising debt-to-GDP ratios – approaching 90% in some economies And she noted that further tightening of global or domestic financial conditions could lead to an increase in the cost of borrowing, and even to a lack of funding in some cases.

Delay in urgent domestic reforms would place a strain on regional prospects and government resources She said, "We are witnessing another difficult year.

But there are reasons for optimism We are not without solutions to make it a better year.

Here, in the region, we can all take a lot from the collective spirit of the Moroccan Atlas Lions and their determination at the World Cup in Qatar " During her speech, she highlighted three principles that countries can guide in using fiscal policies to build resilience, with a later focus on ways to cooperate in order to achieve goals in the range of issues that we will only be able to confront together.

She continued: “The first principle is to put in place a strong framework for managing fiscal policy and dealing with the risks surrounding it In today's shock-prone and uncertain world, managing fiscal policy is becoming more important, but also more complex.

Governments must also manage many risks to their public finances, including from public guarantees and losses of state-owned enterprises, This could lead to debt instability and sharp cuts in essential expenditures Egypt is currently working on strengthening monitoring of these risks to help manage them.

Moreover, credible medium-term fiscal frameworks are being implemented in several Arab countries, which is a key factor in mitigating risks should they materialize, while also enabling governments to sustain necessary spending, maintain debt stability, and build investor confidence Meeting these needs depends on creating an enabling environment for private climate finance through sound financial policies and solutions.

Here, too, the Fund plays its role The climate has become at the heart of our work, and we are currently cooperating with our partners to make the desired progress in implementing the Climate Action Financing Plan.

This includes the new Resilience and Sustainability Trust Fund, which aims to improve policies and provide affordable long-term financing to address climate challenges Discussions are already underway with Egypt and other countries to benefit from funding from the Resilience and Sustainability Trust Fund.

She noted that the third principle is the promotion of tax revenues Investing in a more solid future depends on continuing to strengthen tax policies and tax administration.

Many countries in the region have made significant progress in strengthening their tax capacities However, the average tax-to-GDP ratio, excluding hydrocarbon-related revenues, is still roughly 11% — less than half the possible yield.

She added that the Group of Twenty, headed by Saudi Arabia, and in response to the Covid crisis, launched the initiative to suspend debt service payments in 2020 This was followed by the declaration of the common framework for dealing with debt.

But our mission is not over yet, despite the passage of three years We still need to do more to make the debt-remediation process faster and clearer, and to ensure that all countries benefit from it when needed.

She noted that over the past five years, the GCC countries have made available $54 billion to finance budget and balance of payments needs It provided support to low-income, fragile and crisis-affected countries in the region, through debt relief and food security support.

This includes support announced last year by the Arab Coordination Group of $10 billion Donor countries can continue to support regional economic stability and growth through multilateral initiatives.

She noted that the International Monetary Fund has provided nearly $20 billion in financial support to its member countries in the region since the beginning of the pandemic The Arab world received more than $37 billion as part of the largest SDR allocation in IMF history in 2021, amounting to $650 billion.

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