Latest news with #Azour
Express Tribune
20-05-2025
- Business
- Express Tribune
IMF official visits amid budget talks
Listen to article The International Monetary Fund (IMF)'s regional director, Jihad Azour, is visiting Pakistan this week in the middle of negotiations for approval of the new budget, as both sides are taking time to converge on key issues of increasing taxes and rationalising expenses. Government sources told The Express Tribune that Jihad Azour, the IMF's Director for the Middle East and Central Asia, would also meet Prime Minister Shehbaz Sharif during his visit this week. Azour will also hold discussions with Finance Minister Muhammad Aurangzeb. The regional director is visiting Pakistan 10 days after the approval of the second loan tranche of the $7 billion programme, despite opposition from India. Azour's visit is a testimony to smooth relations between the lender and the borrower, despite New Delhi's negative campaign. Both the Ministry of Finance and the IMF resident representative remained tight-lipped about the purpose of the visit at a time when the IMF staff is already in Pakistan to reach an agreement on the new budget for fiscal year 2025-26. One senior government functionary said the government would take up some outstanding budget-related issues with the IMF director, particularly regarding major spending items. The IMF has imposed a new condition on Pakistan that the government must secure parliamentary approval of the new budget in line with the IMF staff agreement to meet programme targets. This leaves little space for the government to implement its own agenda, although PM Sharif wants to provide relief to the salaried class. The sources said the tax target, defence spending, and some grant-related issues were being discussed. The federal government has decided to allocate nearly Rs2.504 trillion for defence spending in the next fiscal year, which is 18% higher than this year's allocation. However, the IMF's staff-level report released on Saturday showed defence spending at Rs2.414 trillion, an increase of 12%. Some grants and subsidy allocations have also not yet been finalised. The Federal Board of Revenue (FBR) on Monday presented the taxation proposals for the next fiscal year to the prime minister. The PM was also briefed that the FBR's tax target may be around Rs14.07 trillion, which is roughly Rs240 billion less than the earlier mutually agreed target between the IMF and the government for fiscal year 2025-26, they added. However, there is a possibility that the government may substantially increase petroleum levy rates in the Finance Bill 2025. The IMF has projected petroleum levy collection at over Rs1.3 trillion for the next fiscal year, which could become the single largest non-tax revenue source if the government starts charging Rs100 per litre levy on petrol and diesel. The current rate is Rs78 per litre. The finance ministry will have to find space to adjust the Rs240 billion reduction in the earlier agreed target if the petroleum levy is not immediately increased to Rs100 per litre in the budget. For the outgoing fiscal year, the FBR's tax target has further dropped to Rs12.16 trillion after economic growth remained below the government's conservative estimates. The sources said the PM termed the proposed relief in income tax for the salaried class and the cut in super tax rates as insufficient. He directed tax authorities to provide significant respite to salaried individuals in consultation with the IMF. The sources said the PM stated in the meeting that providing relief to the salaried class was his top priority. Salaried individuals paid a whopping Rs437 billion in taxes in just 10 months of this fiscal year, which was Rs150 billion higher than the previous record. The FBR's claims before the prime minister and the IMF that it would compensate for the shortfall in taxes through enforcement measures and by settling litigation cases have proven incorrect. This has created a trust issue between the IMF and the FBR, said the sources. In addition to the standard 29% income tax from the corporate sector, the government also charges a 10% super tax, which might be reduced in phases. The FBR's single biggest failure was its inability to collect the IMF-set target of Rs36.7 billion from traders in nine months under the Tajir Dost Scheme. The IMF report revealed that collections were less than Rs4 million during the first half. For the next fiscal year, the IMF has dropped the Tajir Dost Scheme and proposed a new target, which may shift the focus away from retailers. The IMF and the government have agreed to collect a cumulative Rs531 billion in taxes from retailers in the next fiscal year, including other applicable taxes.
Kuwait Times
03-05-2025
- Business
- Kuwait Times
IMF revises 2025 growth forecasts downwards for Mideast, N Africa
Trade tensions and increased uncertainty expected to weigh on economies DUBAI: The International Monetary Fund revised its 2025 economic forecasts downwards for the Middle East and North Africa on Thursday, with trade tensions and increased uncertainty expected to weigh on growth. 'Growth is still projected to increase in 2025 and 2026, but at a considerably slower pace than anticipated last October,' the IMF said in its regional report published Thursday. The lender lowered growth projections from 4 percent to 2.6 percent for 2025, and from 4.2 percent to 3.4 percent for 2026. The revision reflects 'spillovers from global trade tensions and high global uncertainty, a more gradual recovery in oil production, the lingering effects from conflicts in the region, and slower-than-expected progress on structural reforms in some countries', it said. Tariffs put in place by US President Donald Trump, however, are not expected to have a direct impact on the region. 'Economic integration between countries in the region and the United States is limited', and the energy sector has been spared from the tariffs, Jihad Azour, director of the IMF for the Middle East and Central Asia, told AFP. International Monteary Fund (IMF) managing director Kristalina Georgieva, speaks during a Press Briefing on "International Monetary and Financial Committee (IMFC)" during the IMF/World Bank Group Spring Meetings at the IMF headquarters in Washington, DC, on April 25, 2025. (Photo by Brendan SMIALOWSKI / AFP) But uncertainty weighs worldwide on investment prospects, financial markets and oil prices, amplifying a downturn, he said. In 2024, average growth in the region slowed to 1.8 percent—from 2.1 percent the year before—due to 'ongoing conflicts and extended voluntary oil production cuts'. Growth forecasts for 2025 for the region's oil-exporting countries have been revised down by 1.7 percentage points compared to earlier estimates. Significant disparities remain between the region's oil-rich countries, with growth projected at 3 percent this year for Gulf states, while Iraq is expected to see a 1.5 percent decline. In war-torn Sudan, Yemen and the Palestinian territories, economic prospects are bleak. 'International aid has decreased by about 25 percent since 2021', a trend likely to accelerate, Azour said. The IMF has not provided projections for Lebanon, which is still reeling from the effects of a devastating Israel-Hezbollah war and a 7.5 percent economic contraction in 2024. No estimates were available for Syria, which is emerging from more than a decade of civil war. Reconstruction could trigger recovery in those countries, but that would require significant funding, Azour said. 'Gulf countries are interested in helping conflict-scarred countries rebuild,' he said, 'but it is important that these countries implement the necessary reforms to restore economic and social balance and regain trust'. –AFP
Al Arabiya
02-05-2025
- Business
- Al Arabiya
Exclusive Saudi Arabia's economic diversification positions Kingdom as global heavyweight: IMF
Saudi Arabia's economic diversification strategy has positioned the Kingdom to compete directly with advanced economies as foreign direct investment rises, traditional oil dependency diminishes and the women's workforce more than doubles, according to a senior International Monetary Fund (IMF) official. In an interview on Riyal Deal, presented by Al Arabiya News' Tom Burges Watson, Dr. Jihad Azour, director of the IMF's Middle East and Central Asia Department, highlighted Saudi Arabia's economic resilience amid global uncertainty, pointing to significant gains in non-oil sectors and improvements in key social indicators. 'Saudi economy is becoming much more complex, i.e., much more sophisticated. And this will allow the economy to be more competitive,' Azour said. 'Saudi is the largest economy in the region, but it's getting now more and more connected globally.' The IMF recently published an economic outlook report entitled 'Charting a Path through the Haze,' which examines challenges faced by the Middle East, North Africa, Caucasus, and Central Asia regions amid trade tensions, conflicts, climate shocks, and political instability. Saudi Arabia's economic transformation under its Vision 2030 plan has already shown tangible results, with unemployment reaching its lowest level in decades and female labor force participation more than doubling in just five years. 'Over the last few years, certain number of reforms have helped Saudi not only to grow the economy, but also to reduce unemployment,' said Azour. 'Unemployment is at the lowest level in decades, especially at the youth level. Women's participation in the economy increased from 14 percent to 34 percent in five years.' These achievements are particularly notable given the series of global shocks affecting the region, including the COVID-19 pandemic and subsequent inflation crisis, said Azour, adding: 'Therefore, the Saudi economy is vibrant and dynamic.' The IMF projects Saudi Arabia's real GDP to grow at 3 percent in 2025 and 3.7 percent in 2026, rates that compare favorably to other G20 economies despite some downward revisions due to OPEC+ production decisions. 'In 2021-22, Saudi was the highest growing economy in the G20, thanks to the effort of diversification,' Azour said. 'In 2025 and 2026, the increase in oil production, because of the latest agreement of the OPEC plus, will also grow the oil sector.' The recent OPEC+ agreement to gradually increase exports will contribute to the recovery of both Saudi Arabia's oil sector and overall economy, according to Azour, though the impact has been somewhat tempered by softening oil prices in recent weeks. Saudi Arabia is running 'one of the largest investment programs in the region,' according to Azour, with substantial foreign direct investment flowing into emerging sectors. 'We (have seen) a certain number of sectors, activities, that are…growing in the economy, which attracted FDIs,' Azour explained. When asked to specify these sectors, he pointed to 'technology is one, renewable is another one. You have a massive investment in hospitality, cultural, as well as also touristic activities.' Unlike many regions globally, Saudi Arabia has maintained stable inflation rates, partly due to subsidy programs that help reduce price volatility. 'Inflation is very stable. I would say this is the case in most of the GCC economies,' said Azour. 'And part of it is due to the fact that there are still certain level of subsidies that are helping to reduce the volatility of prices in the economy.' The IMF report emphasizes the impact of global uncertainty on all economies, with potential to reduce growth by 2.5 percent in the short term and 4.5 percent if prolonged for two years. Despite these challenges, Saudi Arabia continues to show resilience. 'Uncertainty is affecting all countries in the world. And in fact, uncertainty usually has a negative impact on growth,' Azour explained. 'Yet compared to other parts of the world, the region is still growing.' The IMF recently established a regional office in Riyadh, recognizing Saudi Arabia's growing influence in global economic affairs. Azour said that Saudi Arabia's Minister of Finance, Mohammed al-Jadaan - currently chairs the International Monetary and Financial Committee (IMFC), which oversees the work of the IMF. 'Saudi is becoming one of the magnets that is attracting not only investment, but also policymakers to discuss economic financial issues,' he said, citing a recent international conference in AlUla that gathered ministers, central bank governors, and scholars from emerging economies. 'This is the recognition of the regional and international role that Saudi is playing,' Azour added. While trade tensions and potential tariffs pose risks to the region, they may also create opportunities for countries like Saudi Arabia to play an expanded role in the global economic landscape, he said. When asked about his overall outlook for the region, Azour described it as robust but facing challenges. 'The region is resilient and has been able to withstand shocks and uncertainties. It was at a high cost, the cost of high unemployment, especially at the youth level, and slow growth for a certain number of countries,' he said. 'What the region needs is to keep modernizing itself, accelerate reforms, be more productive, give more opportunities to the private sector, especially small and medium-sized companies, get more integrated among countries in the region, but also increase the linkages with different geographies.'
Gulf Business
02-05-2025
- Business
- Gulf Business
IMF trims 2025 MENA growth forecast to 2.6% as global risks mount
Image: Getty Images The International Monetary Fund said on Thursday it now expects Middle East and North Africa economies to grow by just 2.6 per cent in 2025 as uncertainties stemming from a global trade war and The fresh projection marked a sharp downgrade from its October projection of 4 per cent growth and comes as the region grapples with geopolitical tensions, softer external demand and oil market volatility. Read- 'Uncertainty could impact the real economy, consumption, investment, all these elements led to a softening of our projections,' Jihad Azour, the IMF's director for the Middle East and Central Asia department, told Reuters in an interview. 'The direct impact of the tariff measures is limited because the integration in terms of trade between the region and the US is limited.' The IMF also pointed to a gradual recovery in oil production, protracted regional conflicts, and delayed structural reforms, particularly in Egypt, in its latest Regional Economic Outlook report released in Dubai. 'The ongoing conflicts in the MENA region have inflicted profound humanitarian costs and left deep economic scars,' it said in the report, adding that the impact has been severe for the region's oil importing economies. The MENA non-oil importers are now expected to see real GDP growth of 3.4 per cent in 2025, versus an earlier forecast of 3.6 per cent. Diverging outlooks Growth among non-Gulf Cooperation Council oil exporters is expected to slow by one percentage point in 2025 – a sharp downward revision – before staging a modest recovery in 2026. On the other hand, GCC economies are projected to strengthen, though at a slower pace than anticipated in October, amid extended OPEC voluntary production cuts through April, a gradual phase-out by end-2026, and weaker non-oil activity. 'With all these changes and challenges, it's important also to seek new trade partnerships,' Azour said, referring to the GCC, a bloc comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. GCC countries have stepped up efforts to diversify their economies, with major initiatives like Saudi Arabia's Vision 2030 and the UAE's push into tourism, logistics and manufacturing aimed at reducing reliance on hydrocarbons. 'Trade diversification, acceleration of structural reforms, and improvement of productivity are all elements that will help the non-oil sector to maintain a strong level of growth,' Azour said. Read more:
Zawya
02-05-2025
- Business
- Zawya
Egypt needs to be careful while lowering interest rates
Cairo - The International Monetary Fund (IMF) said Egypt should be vigilant when cutting interest rates amid global uncertainty due to US President Donald Trump's tariff hikes, according to Bloomberg. The state announced its first interest-rate cut in almost five years last month, after annual consumer-price growth declined to 13.6%, less than half its September 2023 record. Trump's moves led to some cuts in forecasts. However, many economists still expect Egypt to make a combined 600 to 800 basis points of cuts throughout 2025. Jihad Azour, IMF director for the Middle East, North Africa and Central Asia, highlighted that further reductions should be carefully judged. Azour stated: 'With the current shocks, we see a risk of a resumption of inflation and therefore it's very important to maintain the right policy in order to bring inflation down' to a stable, single-digit level. Egyptian President Abdel-Fattah El-Sisi's government and monetary officials allowed the pound to plunge nearly 40% more than a year ago and hiked fuel, electricity and other items to secure foreign funding and end an economic crisis. Azour's comments were echoed by Mohamed Maait, who served as Egypt's finance minister until last year. When he was asked if Egypt's monetary policy was still too tight, Maait noted: 'Given the current global and regional situation, you have to be very cautious.' He added: 'You have to make sure that when you take steps, you are 100% sure that this is the right thing to do, according to data, analysis and information. You cannot take a decision and reverse it later.' The Central Bank of Egypt (CBE) hiked interest rates to a record on the same day it enacted a currency devaluation in March 2024. The benchmark rate remained untouched until last month, when a 225 basis-point cut reduced it to 25%. It expects inflation to keep declining in 2025 and 2026, though at a slower pace than in the first quarter (Q1) of 2025. Upside risks include 'the impact of the current China-US trade war, and an escalation of regional geopolitical conflicts.' Source: Mubasher
