IMF warns on rising debt risks in virus-hit Middle East, Central Asia | Reuters

IMF warns on rising debt risks in virus-hit Middle East, Central Asia | Reuters

The International Monetary Fund said on Sunday countries in the Middle East and Central Asia need to curb their financing requirements, as a surge in government debt, exacerbated by the pandemic, threatens recovery prospects.

The region, which includes around 30 countries from Mauritania to Kazakhstan, saw an economic rebound in the third quarter as countries relaxed measures to contain the new coronavirus.

But the outlook remains highly uncertain and recovery paths will diverge depending on the speed of vaccinations, reliance on heavily impacted sectors, such as tourism, and countries’ fiscal policy.

“Recovery has started, but recovery has started in an uneven, uncertain way,” Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told Reuters.

“The outlook is uncertain because the legacies of the pre-COVID-19 are still there, especially for countries who have high levels of debt.”