IMF Provides Highest Financing to Arab Countries in Decades

Jihad Azour, the IMF Director of the Middle East and Central Asia, speaks during an interview with Reuters television in Beirut, Lebanon, July 12, 2018. REUTERS/Jamal Saidi
Jihad Azour, the IMF Director of the Middle East and Central Asia, speaks during an interview with Reuters television in Beirut, Lebanon, July 12, 2018. REUTERS/Jamal Saidi
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IMF Provides Highest Financing to Arab Countries in Decades

Jihad Azour, the IMF Director of the Middle East and Central Asia, speaks during an interview with Reuters television in Beirut, Lebanon, July 12, 2018. REUTERS/Jamal Saidi
Jihad Azour, the IMF Director of the Middle East and Central Asia, speaks during an interview with Reuters television in Beirut, Lebanon, July 12, 2018. REUTERS/Jamal Saidi

Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), said that the world was going through a delicate stage due to successive shocks and uncertainty in the global economic system. He underlined the need for international cooperation to face challenges, especially with the decline in growth rates and high levels of inflation.

In an interview with Asharq Al-Awsat, Azour said the Arab region’s economies were divided into two categories. Those include, on the one hand, countries that have succeeded in dealing with the crisis, mainly the Gulf States, by adopting efficient measures that led to economic recovery of non-oil sectors, increasing production and export capacity, reducing budget deficit rates and achieving budget surpluses.

The second category, according to Azour, includes Arab countries that are suffering from high consumer prices and a food crisis that is linked to imports from Russia and Ukraine. He noted that these countries would maintain reasonable levels of growth in 2022, but inflation would remain a serious challenge, especially in countries with a high debt ratio.

The IMF and the region

Azour said that the IMF has provided the highest rate of financing to many Arab countries in decades.

He noted that over the past two years, the Fund supported the Arab world with around $50 billion in several stages, to confront the Covid-19 pandemic. These loans have benefitted a large number of countries, in view of the financial crisis that arose with high inflation rates and the change in US monetary policies.

With regards to the role of the Fund in helping Lebanon, Azour said: “A preliminary agreement was reached with the Lebanese government last April, and there are a set of measures that the government must adopt to restore economic stability. This will be an entry point for finalizing the agreement.”

The Director of the Middle East Department at the IMF denied reports on the presence of impossible conditions in lending to Egypt.

He pointed to discussions and technical matters to reach the final version of the agreement.

“In any negotiations, there are procedural details… That’s why things take time,” he said.

Azour continued that the IMF was working with the Egyptian government to reach an agreement that would help the country face shocks, including the repercussions of the Russian-Ukrainian war and the rise in oil and energy prices, and carry out the necessary reforms that contribute to revitalizing investment in the private sector.

The IMF had secured support for Egypt in 2016 through a first program, which had a positive impact on the Egyptian economy, by raising growth levels, capital flows and reserves in the Central Bank, he underlined.

He added that the fund also provided support of about $8.8 billion to Egypt in 2020 to confront the Covid-19 pandemic.

The world economy

Azour pointed to the global high inflation levels, as well as geostrategic conditions that affected food security and production chains, in parallel with the rise in the price of the dollar compared to other currencies.

A re-evaluation of the economic outlook for this year indicates that the major economies would witness a slowdown in growth levels, he told Asharq Al-Awsat.

He explained that economies of the Arab region were divided into two tracks. The path of the oil-producing countries, especially the Gulf, which are taking a positive turn, thanks to the measures they took during the Covid-19 pandemic. Those countries have seen an economic recovery of the non-oil sectors in 2021, in parallel with the rise in oil prices and the increase of production and export capacity, which contributed to enhancing growth.

On the other hand, Azour said that oil-importing countries were suffering from high prices, in parallel with a food crisis that is linked to imports from Russia and Ukraine.

These countries will maintain reasonable levels of growth in 2022, but the main challenge for them is to confront inflation, and the impact of high global prices, especially countries with a high debt ratio, he remarked.

Saudi Arabia and the global crisis

In his interview with Asharq Al-Awsat, the IMF Middle East and Central Asia director said that Saudi Arabia, as well as the UAE, succeeded during the Covid-19 pandemic in taking quick measures, which mitigated the impact of the crisis.

This was followed by other measures to improve the labor market and raise production capacity, he noted, adding that indicators in Saudi Arabia pointed to a decline in unemployment levels among citizens and residents.

Future outlook

Azour noted that the current difficult stage required rapid action in terms of reforms and policies, as well as cooperation of countries to face challenges.

“It is true that there are declines in growth, but those are natural... There are high levels of inflation that must be reduced, and there are balances that must be stabilized between supply and demand at the global level,” he remarked.

He explained that the global economy in 2022 was witnessing growth. Economies of the region are expected to achieve a 5 percent growth this year, and 5.3 percent in 2023.

“We are going through a delicate stage, given the successive shocks and uncertainty in the direction of the global economic system,” he stated.



Fitch Affirms ‘AA’ Credit Rating for Qatar

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
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Fitch Affirms ‘AA’ Credit Rating for Qatar

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)
As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 (Reuters)

Fitch Ratings affirmed Qatar's long-term foreign-currency rating at "AA" and a "stable" outlook on Friday, saying its strong balance sheet and plans to sharply increase LNG output should help cushion the impact of the escalating Middle East conflict.

The US-Israel war with Iran has disrupted shipments from the world's most important oil artery, the Strait of Hormuz, which is responsible for 20% of global oil and liquefied natural gas supply.

The impact on LNG exports is likely ⁠to widen Qatar's ⁠fiscal deficit in 2026, contingent on how long the conflict lasts, but the country should be able to more easily tap debt markets or draw on its sovereign wealth fund, the Qatar Investment Authority (QIA), which has built up ⁠assets over decades of investing at home and globally.

Fitch said it assumes the conflict would last less than a month and the strait would remain closed during that period, with no major damage to regional hydrocarbon infrastructure. Under its baseline scenario, the agency expects Brent crude to average $70 a barrel in 2026.

As LNG production increases, Fitch projects the general government budget surplus will rise ⁠to ⁠4.1% of GDP in 2027 and exceed 7% by 2030. Excluding investment income, the budget is expected to return to surplus from 2027, with most excess revenue likely to be transferred to QIA for overseas investment.

The agency expects Qatar to meet its 2026 funding needs through a combination of central bank overdrafts, domestic and international market borrowing, and drawdowns on the finance ministry's deposits in the banking sector.


Trump Seeks to Close $1.6 trillion Revenue Gap with Raft of New Tariffs

US President Donald Trump speaks before signing the "Genius Act", which will develop regulatory framework for stablecoin cryptocurrencies and expand oversight of the industry, at the White House in Washington, D.C., US, July 18, 2025. REUTERS/Nathan Howard/File Photo
US President Donald Trump speaks before signing the "Genius Act", which will develop regulatory framework for stablecoin cryptocurrencies and expand oversight of the industry, at the White House in Washington, D.C., US, July 18, 2025. REUTERS/Nathan Howard/File Photo
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Trump Seeks to Close $1.6 trillion Revenue Gap with Raft of New Tariffs

US President Donald Trump speaks before signing the "Genius Act", which will develop regulatory framework for stablecoin cryptocurrencies and expand oversight of the industry, at the White House in Washington, D.C., US, July 18, 2025. REUTERS/Nathan Howard/File Photo
US President Donald Trump speaks before signing the "Genius Act", which will develop regulatory framework for stablecoin cryptocurrencies and expand oversight of the industry, at the White House in Washington, D.C., US, July 18, 2025. REUTERS/Nathan Howard/File Photo

The Trump administration this week stepped up its ambitious effort to replace about $1.6 trillion in lost tariff revenue that was eliminated by the Supreme Court's decision to strike down a range of the president's import taxes.

Recovering that lost revenue, which the White House was counting on to help offset the steep, multi-trillion dollar cost of its tax cuts, is possible but will be challenging, experts say. The administration has to use different legal provisions to impose new duties, and those provisions require longer, complex processes that US companies can use to seek exemptions. It could be months or more before it is clear how much revenue the replacement tariffs will yield.

“I wouldn't bet against this administration being able to get back on paper the same effective tariff rate they had before," said Elena Patel, co-director of the Urban-Brookings Tax Policy Center. But the new approach will “make it easier for people to contest the tariffs, which is going to put a big asterisk on the revenue until all that is settled.”

On Wednesday, US Trade Representative Jamieson Greer said the administration will investigate 16 economies — including the European Union — over whether their governments are subsidizing excessive factory capacity in a way that disadvantages US manufacturing. The investigation will also cover China, South Korea, and Japan, Greer said.

In addition, he said there would be a second investigation of dozens of countries to see if their failure to ban goods made by forced labor amounts to an unfair trade practice that harms the United States. That investigation will also cover the EU and China, as well as Mexico, Canada, Australia, and Brazil.

Both investigations are being conducted under Section 301 of the 1974 Trade Act, which requires the administration to consult with the targeted countries, as well as hold public hearings and allow affected US industries to comment. A hearing as part of the factory capacity investigation will be held May 5, while a hearing on the forced labor investigation will occur April 28.

It's a far cry from the emergency law that President Donald Trump relied on in his first year in office, which allowed him to immediately impose tariffs on any country, at nearly any level, simply by issuing an executive order.

Moments after the Supreme Court's ruling, Trump imposed a 10% tariff on all imports under a separate legal authority, but that duty can only last for 150 days. The president has said he would raise it to 15%, the maximum allowed, but has yet to do so. Some two dozen states have already challenged the new tariffs. The administration is aiming to complete its Section 301 investigations before the 10% duties expire.

The effort underscores the importance that the Trump White House has placed on tariffs as a revenue-raiser at a time when the federal government is facing huge annual budget deficits for decades into the future. Previous administrations, by contrast, used tariffs more sparingly to narrowly protect specific industries.

Erica York, vice president of federal tax policy at the Tax Foundation, noted that the first investigation covers roughly 70% of imports, while the second would cover nearly all of them.

“That breadth suggests the goal isn’t to address the issues at hand, but instead to recreate a sweeping tariff tool,” she said, The AP news reported.

Trump sees tariffs as a way to force foreign countries to essentially help pay the cost of US government services, even though all recent economic studies find that American companies and consumers are paying the duties, including ones from the Federal Reserve Bank of New York and economists at Harvard University. In his state of the union address last month, Trump even touted his tariffs as a potential replacement for the income tax, which would return the United States’ tax regime to the late 19th century.

Trump also wants tariffs to help pay for the tax cuts he extended in key legislation last year. The tax cut legislation is expected, according to the most recent estimates by the nonpartisan Congressional Budget Office, to add $4.7 trillion to the national debt over a decade, while all Trump's duties, including ones not struck down by the court, were projected to offset about $3 trillion — or two-thirds of that cost.

The court’s ruling Feb. 20 that he could no longer impose emergency tariffs eliminated about $1.6 trillion in expected revenue over the next decade, according to the CBO.

Some of Trump's tariffs remain place, including previous duties on China and Canada that were imposed after earlier 301 investigations. The administration has also slapped tariffs on some specific products, including steel, lumber, and cars. Those, combined with the 10% tariff for part of this year, should yield about $668 billion over the next decade, the Tax Foundation estimates.

“It’s going to take a really big patchwork of these other investigations to make up for the (lost) tariffs,” York said.

The administration's efforts are also unusual because they reflect an overreliance on tariffs to bring in more government revenue. Trump has also said the duties are intended to return manufacturing to the United States, and he has used them to leverage trade deals.

“What makes this really different,” said Kent Smetters, executive director of the Penn Wharton Budget Model, “it is really the first time tariffs have been mainly used as a revenue raiser.”

Patel, meanwhile, argues that raising revenue can be done more reliably and straightforwardly by Congress. Laws like Section 301 are traditionally intended to be used to address specific trade policy concerns in particular countries.

“It’s not supposed to be there to raise revenue,” she said. “If we want to raise revenue through tariffs, then Congress should impose a broad based tariff.”


Japan, South Korea Say Ready to Act Against FX Volatility

FILE PHOTO: Japan's Finance Minister Satsuki Katayama speaks on the day Japan's Prime Minister Sanae Takaichi delivers her policy speech in the parliament, in Tokyo, Japan, February 20, 2026. REUTERS/Kim Kyung-Hoon/File Photo
FILE PHOTO: Japan's Finance Minister Satsuki Katayama speaks on the day Japan's Prime Minister Sanae Takaichi delivers her policy speech in the parliament, in Tokyo, Japan, February 20, 2026. REUTERS/Kim Kyung-Hoon/File Photo
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Japan, South Korea Say Ready to Act Against FX Volatility

FILE PHOTO: Japan's Finance Minister Satsuki Katayama speaks on the day Japan's Prime Minister Sanae Takaichi delivers her policy speech in the parliament, in Tokyo, Japan, February 20, 2026. REUTERS/Kim Kyung-Hoon/File Photo
FILE PHOTO: Japan's Finance Minister Satsuki Katayama speaks on the day Japan's Prime Minister Sanae Takaichi delivers her policy speech in the parliament, in Tokyo, Japan, February 20, 2026. REUTERS/Kim Kyung-Hoon/File Photo

Japan and South Korea expressed concern on Saturday about the rapid declines in their currencies, saying they were ready to act against excessive foreign-exchange volatility.

Finance Ministers Satsuki Katayama of Japan and Koo Yun-cheol of South Korea "expressed serious concern over the recent sharp depreciation of the Korean won and the Japanese yen," they said in a statement after their annual meeting in Tokyo.

The yen and won have slid as mounting tensions from the US-Israeli war on Iran have driven the dollar higher ⁠on safe-haven demand and ⁠battered the currencies of countries heavily reliant on imported oil.

"Furthermore, they reaffirmed that they will closely monitor foreign exchange markets and continue to take appropriate actions against excessive volatility and disorderly movements in exchange rates," the statement said.

The yen touched its lowest in 20 ⁠months on Friday and is near the line of 160.00 to the dollar that many in the market think might prompt Japan to intervene to support the currency. The won breached a psychological barrier of 1,500 per dollar this month for the first time since March 2009.

Tokyo and Seoul shared the view that significant volatility had emerged in financial markets, including foreign exchange, Katayama told a press conference after the meeting.

"The Japanese government ⁠is ⁠fully prepared to respond at any time, bearing in mind the impact that currency moves may have on people's livelihoods amid surging oil prices, and I believe both sides share that understanding," she said.

Katayama regularly says Japan is ready to act regarding yen moves, although some policymakers privately say that intervening to prop up the yen now could prove futile, as the flood of dollar demand will only intensify if the war persists.