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World Bank: Middle East and North Africa debt swells due to Corona crisis

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As a result of the corona crisis, the public debt of MENA countries will swell to 54 percent of their gross domestic product this year, compared with 46 percent in 2019. This is what the World Bank warned in a report Friday, noting that the debt volume of oil-importing countries in the region will account for up to 93 percent of their gross domestic product in 2021.

 

The Middle East and North Africa’s public debt will swell to 54 percent of GDP this year, compared with 46 percent in 2019, due to expenditures related to covid-19, the World Bank warned in a report Friday.

 

The World Bank noted that MENA countries have seen a “significant increase in their debt” due to having to “borrow heavily” to finance “basic care costs and social protection measures”.

 

The debt of oil-importing countries in the region will account for up to 93 percent of their gross domestic product in 2021, he said. “MENA countries will have no choice but to continue spending on health care and social protection as long as the pandemic continues,”he added.

 

The region, which includes about 20 countries, saw its economy shrink by 3.8 percent last year. The World Bank estimates a cumulative decline in activity in the region by the end of 2021 at دولار 227 billion. But he expects a partial recovery this year”provided there is a fair distribution of vaccines.”

 

Despite the ballooning debt, the World Bank continues to recommend that countries spend to address the health crisis, stressing that “continued spending and continued borrowing will remain an urgent necessity for the time being.”

 

But this international financial institution warned that “in a post-pandemic world,” it is expected that “most countries in the MENA region will end up with debt service bills that will require resources that could have been used for economic development.”

 

The World Bank predicts that it is necessary to consider how to “mitigate the costs of excessive indebtedness in the medium term”, calling on countries to transparency in spending and borrowing in relation to the cover-19.

 

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