The IMF is in talks to provide more loans to countries in the Middle East and North Africa as the region grapples with fiscal deficits and slower economic growth.
Recent IMF loans to oil-importing countries in the Middle East, North Africa, Afghanistan and Pakistan region have reached more than US$15 billion as more countries seek help to address their economic and financial woes.
The IMF may extend a second loan to Iraq next year after providing it with a $1.24bn loan in July to help it balance its payments, said Masood Ahmed, the director of the IMF’s Middle East and Central Asia department.
As an oil-exporting country, Iraq is affected by the oil price slump as well as the insurgency of the Islamic State. Iraq will post flat growth, and its fiscal deficit will widen to 23 per cent of GDP this year from 5.3 per cent last year, according to IMF estimates.
The IMF is also in talks with Tunisia and expects to conclude negotiations next year. The IMF agreed in 2013 to provide Tunisia with a $1.75bn loan to boost its growth and strengthen its fiscal and external buffers as the country grapples with a fiscal deficit and aftermath of the its 2010 revolution. The loan programme ends this year. Recent terrorist attacks in Tunisia will also lower the country’s foreign currency receipts and further dent its finances.
Jordan, which received a $2.1bn IMF loan in 2012 under a programme that ends this year, has also initiated talks for more loans. Jordan is struggling to support its economy as refugees fleeing the conflict in Syria flood the country. Refugees in Jordan make up a fifth of the population.
The size of the new loans for each country will depend on that talks and the needs of each economy, said Mr Ahmed.
“All of them [loans] are associated with a programme that the country sets out to address the imbalances that caused it to come to the IMF and how it proposes to address those imbalances, and then there are some policy measures that they set out.”
dalsaadi@thenational.ae
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