The World Bank has warned that economic growth in the Middle East and North Africa (MENA) region is expected to slow in 2023, as double-digit food inflation adds pressure on poorer households.
In its latest economic update, the World Bank said that MENA’s GDP growth is expected to slow to 3.0% in 2023, from 5.8% in 2022. This slowdown is due to a number of factors, including the war in Ukraine, which has disrupted global food and energy markets, and the COVID-19 pandemic, which has continued to weigh on economic activity.
The World Bank said that food inflation in MENA is expected to average 29% in 2023, up from 14.8% in 2022. This will put a strain on household budgets, particularly in poorer households, and could lead to social unrest.
The World Bank urged MENA governments to take steps to mitigate the impact of food inflation, including providing subsidies to low-income households, increasing food production, and investing in social safety nets.
The World Bank also said that MENA countries need to diversify their economies away from oil and gas, which are vulnerable to price shocks. The World Bank said that MENA countries need to invest in agriculture, manufacturing, and tourism.
