BAKU, Azerbaijan, Feb.2. International Monetary
Fund (IMF) stands ready to support the Arab region—with integrated
policy advice, financing, and capacity development, said Managing
Director Kristalina Georgieva, as she addressed participants at the
tenth anniversary of the Arab Fiscal Forum, Trend reports via the
IMF.


Georgieva noted close cooperation on fiscal issues through the
IMF’s Fiscal Affairs Department, as well as capacity development
hubs including METAC in Lebanon, the CEF in Kuwait, and the IMF’s
regional office in Riyadh.


According to the IMF managing director, the global economy is
projected to grow by 3.3 percent this year and 3.2 percent next
year, supported by private sector agility, accommodative financial
conditions, and sustained reforms, particularly in emerging
markets. Inflation is expected to decline to 3.8 percent this year
and to 3.4 percent by 2027, driven by softer demand and lower
energy prices.


She said the Arab region has also demonstrated resilience, with
growth expected to increase to 3.7 percent this year. Oil-exporting
countries are benefiting from higher production, while oil
importers are gaining from lower prices, strong remittances, and a
rebound in tourism. Financial conditions have improved, several
countries have regained market access, and some have made progress
in economic diversification and infrastructure investment,
including efforts to harness artificial intelligence. Economies
emerging from conflict, she added, are beginning the difficult path
to recovery.


At the same time, Georgieva warned that “daunting risks remain,”
citing geopolitical tensions, trade protectionism, rising debt
levels, and uncertainty over AI-driven productivity gains. She also
pointed to continued conflicts and significant humanitarian needs
across parts of the region.







Oil price volatility remains a key concern, she said, noting
that prices could weaken if global demand softens amid trade
tensions, while the unwinding of OPEC+ production cuts could worsen
supply-demand imbalances.


Georgieva outlined a range of structural challenges facing the
region, stressing that oil exporters must manage price volatility
while advancing diversification, oil importers face debt
vulnerabilities and exposure to global financing conditions, and
low-income and fragile economies continue to grapple with conflict,
displacement, and food insecurity.


She emphasized the importance of resilient policy frameworks, a
dynamic private sector, and strong fiscal credibility. “Only the
private sector can create enough jobs for the vast numbers of young
people entering the region’s labor force,” Georgieva said, calling
for a gradual refocusing of the government’s role from driving
growth to creating conditions for growth.


Highlighting the need for reforms to boost productivity, she
pointed to entrepreneurship, foreign direct investment, trade
integration, and support for countries emerging from conflict as
key priorities, underscoring the role of sustained international
support in rebuilding institutions and financing
reconstruction.