WASHINGTON (Reuters) – Banks in the Middle East and Central Asia had very limited exposure to last month’s U.S. and European banking turmoil, but financial stress was exacerbated by high interest rates, volatile oil prices and the International Monetary Fund. Double-digit inflation has been going on for years, a senior official said Saturday.
Azour said there was a growing gap between creditworthy countries with access to markets, including Morocco, Jordan and oil exporters, and
“We Worrying because the risk matrix keeps building up: high interest rates, oil price volatility, geopolitical tensions, and this is the third year in a row that you have double-digit inflation,” he said.
He said financial sector stability was not the primary concern, with concerns over high debt levels, the risk of social unrest and capacity now overwhelming to maintain austerity policy due to social pressures.
“We see vulnerabilities rising again, which is why countries are being encouraged to undertake more structural reforms that would lift their growth rates by at least one or two percent,” he said. “They have a window of opportunity where governments are now willing to do more than put money in central bank coffers.”
IMF forecasts for Middle East and Middle East GDP on Thursday Growth in North Africa will slow to 2023 3.1% from 5.3% a year ago.