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IMF Calls for Energy Subsidy Reform in Middle East Amid Economic Uncertainty


Feb 11, 2024
Despite uncertainties, IMF’s Georgieva expresses confidence in the global economic outlook

During a speech at the World Government Summit in Dubai, International Monetary Fund (IMF) Managing Director Kristalina Georgieva expressed confidence in the global economic outlook despite uncertainties related to war and geopolitics. Georgieva also announced that the IMF would release a paper the following day showing that phasing out explicit energy subsidies in the Middle East could result in significant savings of $336 billion, equivalent to the entire economies of Iraq and Libya combined.

Georgieva emphasized that eliminating regressive energy subsidies would not only lead to substantial cost savings but also discourage pollution and help improve social spending. However, the IMF recently revised its GDP growth forecast for the Middle East and North Africa region downward to 2.9% this year, partly due to short-term oil production cuts.

Despite ongoing uncertainties, Georgieva expressed confidence in the global economy, noting that it has shown remarkable resilience. She also warned of the wide-ranging consequences of the conflict in Gaza and its potential to further exacerbate economic challenges faced by economies still recovering from previous shocks.

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