ABU DHABI, UNITED ARAB EMIRATES - In its continued efforts to support policymakers in Arab countries, the Arab Monetary Fund (AMF) published the 19th edition of its "Arab Economic Outlook" report.

The report offers a detailed analysis of the economic performance and prospects of Arab countries, considering the latest global economic developments and their potential impacts on the region. The report aims at helping policymakers throughout the Arab world in navigating the complex global economic environment.

It provides insights on the economic growth and inflation trends for the Arab region and the groups of Arab countries. The AMF recognizes the importance of understanding the unique challenges and opportunities facing the Arab countries in a highly interconnected and uncertain world.

Therefore, this report not only sheds light on the current economic situation but also highlights the growth potential and progress in the coming years by identifying the views and expectations of the experts and policymakers in the Arab countries and the sources of growth in the Arab region.

This issue also covers the contribution of expenditure items to inflation in several Arab countries, as we believe that understanding the most important expenditure items that contribute to inflation is essential for policymakers in our Arab countries to formulate effective monetary and fiscal policies, ensure social stability, manage support, and preserve purchasing power.

This edition of the report reveals that the growth rate of Arab economies is expected to decrease in 2023, to around 2.2 percent, down from approximately 5.8 percent in 2022. However, the report forecasts a rebound in 2024, with growth expected to reach approximately 3.3 percent. This projection reflects the broader economic climate and the impact of ongoing global challenges, including interest rate changes and oil market dynamics.

Regarding inflation, Arab countries are projected to experience a relatively high rate of 9.3 percent in 2023, influenced by various factors such as fluctuations in currency exchange, energy, and food prices. However, the report anticipates a decline in inflation to around 3.6 percent by 2024. These inflation trends underscore the complex economic landscape in which Arab countries operate and the need for careful policy management.

The report also emphasizes the diversity of economic conditions across the Arab world, categorizing countries into oil-exporting and oil-importing groups, each facing unique challenges and opportunities. The analysis provided in the report is instrumental for understanding the varied impacts of global economic trends on these groups and tailoring policies to their specific needs.

The report complements the other AMF publications, especially the Joint Arab Economic Report. With the issuance of the two reports, those interested in Arab economic affairs can follow the current economic developments in the Arab countries and anticipate economic performance prospects in future periods. We hope that the Arab Economic Outlook will be an added value to the efforts made by the AMF to serve its member countries and to be a valuable tool for policymakers in our Arab countries, investors, companies, and researchers alike, enabling them to make sound decisions and contribute to sustainable development in our beloved region.

The Arab Monetary Fund remains committed to providing timely and comprehensive economic analysis to assist Arab countries in navigating the complex global economic landscape and achieving sustainable growth and stability.

The Arab Monetary Fund (AMF) revealed that the total public expenditure of Arab countries combined jumped by 9.8 per cent to $957.5 billion in 2022, compared to $878.9 billion in 2021.

AMF, in its Joint Arab Economic Report, explained that current expenditure in Arab countries increased by about 9.9 per cent to reach $824.6 billion in 2022, compared to $750.7 billion in 2021, while the capital expenditures (CapEx) increased by about 3.6 per cent to $132.5 billion.

Economic Growth Projections

The growth rate of Arab economies in 2023 is projected to be around 2.2 percent, decreasing from about 5.8 percent in 2022 due to the tightening of monetary policy, the decline in oil production, and the recent developments in the region. However, a recovery is expected in 2024, with growth projected to reach approximately 3.3 percent.


Inflation Trends

The inflation rate for Arab countries is projected to be 9.3 percent in 2023 before declining to around 3.6 percent in 2024. Several factors influence these figures, including currency exchange pressures in several countries, energy and food price fluctuations, and other country-specific conditions.


Policy Priorities

Policymakers in Arab countries will continue to focus on adjusting fiscal and monetary policies in response to these economic challenges. This includes rationalizing tax exemptions, revisiting subsidy policies, strengthening social safety nets, developing monetary policy frameworks, and implementing macroprudential policy reforms.

Policy challenges and opportunities

The report highlights the importance of understanding the unique challenges and opportunities facing the Arab countries in a highly interconnected and uncertain world and suggests policy actions to enhance growth potential, ensure social stability, manage support, and preserve purchasing power.

Global Economic Developments

The report examines the anticipated effects of global economic developments, including the inflationary wave and tightening of monetary policies, on the Arab region. It also analyses the impact of these developments on economic growth, particularly in oil-exporting and oil-importing Arab countries.

For the full version of the report in Arabic, visit: https://www.amf.org.ae/ar/publications/tqryr-afaq-alaqtsad-alrby/tqryr-afaq-alaqtsad-alrby-nwfmbr-2023