MEU April 2023

Middle East and North Africa Economic Update



Part I | Macroeconomic Developments and Outlook

World Bank economists forecast that growth in the Middle East and North Africa (MENA) will slow to 3% in 2023 after growing 5.8% in 2022 when Gulf Cooperation Country (GCC) economies benefited from oil windfalls. While Gulf economies will decelerate the most in 2023, growth remains uneven across country groups. The region’s GDP per capita growth, which is a more accurate measure of poverty, is expected to decline to 1.6% from 4.4% in 2022. The region’s inflation rate rose dramatically in 2022, especially in countries that experienced currency depreciations. Year-on-year food inflation increased for nearly all countries in MENA and 14 out of 16 had higher food inflation than headline inflation.


Part II | Altered Destinies

The second part of the report focuses on food price inflation and its impact on food insecurity. The report found that eight out of 16 countries suffered from double-digit average year-on-year food inflation between March and December 2022, a devastating blow for poorer families who spend a larger share of their budgets on food than those who are better off. More concerning is that even if food price inflation is temporary, the impact may be felt for generations as malnourished children often perform poorly in school, have lower incomes and career prospects, while also suffering from ill health. Conservative estimates indicate that at least 200,000 children were born stunted in 2022 due to in-utero exposure to food insecurity driven by rising food prices. The report suggests a range of policy tools to help alleviate food insecurity, including targeted cash and in-kind transfers, plus a range of gender policies aimed at mothers who play a vital role both in utero and in early childhood development. Additional challenges highlighted by the report include a lack of current data on childhood health and nutrition.


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