IMF Warns: MENA Region Faces 4 Challenges

International Monetary Fund Managing Director Kristalina Georgieva speaks at a news conference during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Thursday, April 13, 2023. (AP)
International Monetary Fund Managing Director Kristalina Georgieva speaks at a news conference during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Thursday, April 13, 2023. (AP)
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IMF Warns: MENA Region Faces 4 Challenges

International Monetary Fund Managing Director Kristalina Georgieva speaks at a news conference during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Thursday, April 13, 2023. (AP)
International Monetary Fund Managing Director Kristalina Georgieva speaks at a news conference during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Thursday, April 13, 2023. (AP)

Growth of the real GDP in the Middle East and North Africa (MENA) region is projected to slow this year to 3.1 percent from 5.3 percent in the previous year, announced Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), Jihad Azour.

Azour added that inflation is forecast to remain unchanged at around 15 percent this year before declining modestly in 2024.

In a videoconference attended by Asharq Al-Awsat, Azour explained that the MENA countries face four challenges this year, which are dealing with the effects of inflation, global uncertainty, international financing difficulties, and economic reform developments.

Azour explained that dealing with inflation may require increasing interest rates, which affects economic growth. At the same time, uncertainty and geopolitical tensions pervade all global horizons, and their consequences fall on everyone's shoulders.

Concerning oil-importing countries, the rise in energy prices increases the risks, especially with the increase in the cost of financing and the difficulty in obtaining it. As for the oil-exporting countries, the most critical challenge is growing and diversifying revenues.

Meanwhile, Italian Foreign Minister Antonio Taiani said Thursday that his country wants the IMF to start disbursing a loan to Tunisia without conditions.

During a press conference with his Tunisian counterpart, Tajani vowed to work on Tunisia's behalf in negotiations with the IMF, repeating Italy's proposal that the loan be delivered in two tranches and not be fully dependent on all reforms being in place.

"But not utterly conditional on... the conclusion of the reform process. Start financing, encourage the reforms," he told reporters.

Last week, President Kais Saied rejected IMF "diktats", which asked Tunisia to carry out economic reforms and subsidy cuts as terms for the stalled bailout.

Saeed said he would "not hear diktats" from abroad, warning that the subsidies could lead to unrest.

European leaders feared the collapse of the Tunisian economy could increase the influx of immigrants to European shores.

Tunisia's debts amount to about 80 percent of its gross domestic product, and it reached a preliminary agreement with the Fund in mid-October for a new $1.9 billion loan to help overcome the financial crisis.

However, talks reached a dead end after Tunisia failed to implement a reform program to restructure more than 100 indebted state-owned companies and lift subsidies on some essential goods and services.



Dollar Drifts as Traders Grapple with Tariff Uncertainty, Volatility

A teller counts US dollar bank notes at a money changer in Jakarta, Indonesia, April 9, 2025. Picture taken through glass. REUTERS/Willy Kurniawan/File Photo
A teller counts US dollar bank notes at a money changer in Jakarta, Indonesia, April 9, 2025. Picture taken through glass. REUTERS/Willy Kurniawan/File Photo
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Dollar Drifts as Traders Grapple with Tariff Uncertainty, Volatility

A teller counts US dollar bank notes at a money changer in Jakarta, Indonesia, April 9, 2025. Picture taken through glass. REUTERS/Willy Kurniawan/File Photo
A teller counts US dollar bank notes at a money changer in Jakarta, Indonesia, April 9, 2025. Picture taken through glass. REUTERS/Willy Kurniawan/File Photo

The dollar wobbled on Tuesday, languishing near a three-year low against the euro and a six-month trough against the yen it hit last week, as investors struggled to make sense of the back-and-forth changes on US tariffs.

Still, currency markets were a lot calmer in Asian hours after last week's turmoil that badly bruised the dollar despite a surge in Treasury yields, highlighting shaky investor confidence in the greenback and US assets.

The dollar was slightly weaker at 142.99 yen, staying close to the six-month low of 142.05 it touched on Friday. The euro last fetched $1.136, just below the three-year high of $1.1474 hit last week.

After slumping to a 10-year low against the Swiss franc last week, the dollar was 0.2% higher on Tuesday. Still, the dollar is down nearly 8% against the Swiss franc this month, set for its biggest monthly drop since December 2008, Reuters reported.

Market focus has been on the ever-shifting tariff headlines with the US removing smartphones and other electronics from its duties on China over the weekend providing some relief, although comments from President Donald Trump suggested the reprieve is likely to be for a short time.

Trump's imposition and then abrupt postponement of most tariffs on goods imported to the US has sowed confusion, adding to the uncertainty for investors and policymakers around the world.

Kieran Williams, head of Asia FX at InTouch Capital Markets, said the policy uncertainty and erosion in investor confidence are fuelling a slow but steady rotation out of dollar assets.

"The recent backpedaling on US tariffs has eased some of the acute market anxiety, softening the dollar’s safe-haven appeal in the near term."

The yield on the benchmark US 10-year Treasury note eased 1.5 basis points to 4.348% after dropping nearly 13 basis points in the previous session.

The yields had risen about 50 bps last week in the biggest weekly gain in over two decades as analysts and investors questioned US bonds' status as the world’s safest assets.

"Last week was all about deleveraging, liquidation, and asset re-allocation out of US assets. This week's tone is calmer in what is a holiday shortened week," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities.

"Helping to set the tone were dovish comments from Fed officials suggesting they are looking beyond inflation."

Fed Governor Christopher Waller said on Monday the Trump administration's tariff policies are a major shock to the US economy that could lead the Federal Reserve to cut interest rates to head off a recession even if inflation remains high.

Traders are pricing in 86 bps of cuts from the Fed for the rest of the year, LSEG data showed.

The dollar index, which measures the US currency against six other units, was at 99.641, not far from the three-year low it touched last week. The index is down over 4% this month, set for its biggest monthly drop since November 2022.

Sterling last bought $1.3215. The Australian dollar rose 0.66% to $0.6369, while the New Zealand dollar surged to its highest in four and half months and was last 0.88% higher at $0.5926.