WASHINGTON, April 2 (KUNA) -- Economies of the Middle East and North Africa (MENA) region are facing a rapid accumulation of public debt due to challenges and repercussions caused by the coronavirus (COVID-19), the World Bank (WB) said Friday.
The accumulated cost of the pandemic estimated to top USD 227 billion by end of 2021, the WB added in its report.
Challenges in the MENA region have aggravated due to the pandemic, which contributed to a rise in poverty, a deterioration of public finances, an increase in debt vulnerabilities, and a further erosion of trust in government, it noted.
The substantial borrowing that MENA governments incurred to finance health and social protection measures increased government debt, it pointed out.
The report shows that the region's economies are estimated to have contracted by 3.8 percent in 2020, which is 1.3 percentage points above the World Bank forecasts in October 2020; however, the regional growth estimate is 6.4 percentage points lower than the pre-pandemic growth forecast published in October 2019.
The region's economies are expected to recover only partially in 2021, by 2.2 percent, but that recovery is, in part, dependent on an equitable rollout of vaccines.
According to the report, the substantial borrowing that MENA governments had to incur to finance essential health and social protection measures increased government debt dramatically: the average public debt in MENA countries is expected to rise 8 percentage points, from about 46 percent of GDP in 2019 to 54 percent in 2021.
Notably, debt among MENA oil importers is expected to average about 93 percent of GDP in 2021, the report concluded. (end)