Why fiscal stimulus could be the only hope for MENA economic recovery in 2021 | ZAWYA MENA Edition:
Fiscal stimulus and policy will play a crucial role in the MENA region's upturn in the wake of the COVID-19 pandemic and the oil price plunge in the first half of 2020, experts say.
Banking giant MUFG's forecasts indicate that, by the end of 2021, the region will have a level of activity that is well below its pre-pandemic growth trajectory. In many cases, it will record activity below its 2019 level. In addition, deep recessions are expected in 2020 across almost all MENA regional economies.
The overall real GDP growth in MENA region is expected to contract in 2020 by -5.6 percent from +0.2 percent in 2019. In the GCC, the real GDP growth is expected to fall by -3.9 percent in 2020 from +0.6 percent in 2019.
According to Ehsan Khoman, Head of MENA Research and Strategy at MUFG, fiscal stimulus will keep playing a significant role in the recovery. "Policymakers in the Middle East and North Africa are well aware that they will have to do more,” he said.
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