Nearly a quarter of the youth in the Middle East are unemployed.
Without measures, millions of people will be out of work every year,according to the IMF.
The warning is to be found in the May report to the International Monetary Fund (IMF) on the economic outlook in the region.
According to the IMF, current job growth could not reduce unemployment,which was an important reason why many joined the mass protests in the Middle East during the so-called Arab Spring of 2011.
The IMF pointed out, among other things, that countries dependent on oil imports in the Middle East and North Africa need 6.2% growth a year to keep overall unemployment at today’s 10% level. They must also be able to create 25 million new jobs over the next five years, according to Jihad Azour,IMF Director for the Middle East and Central Asia.
According to the IMF’s outlook, growth for these countries is expected to remain at current levels, which is just over 4%.
The combination of high unemployment and rising government debt is particularly worrying in the countries of the Middle East and North Africa, Azour argued.
He pointed out that the average debt for oil importing countries in the region has now exceeded 80% of GDP.
As for countries exporting oil, growth has fluctuated sharply in recent years in line with oil prices. While it was up to 5% in 2016, it dropped to 1.7% the following year.
The IMF estimates that growth will again rise to 3% this year, and 3.3% next year.
Oil prices are now approximately 75 dollars, compared to less than 30 dollars in early 2016.
Need for reforms
But it will not rest here according to the IMF, which recommended that countries use the good times to carry out economic reforms.
“Among the reforms that are required, there are several measures that will completely
eliminate energy subsidies, as well as changes to pension and social security systems,including a revision of retirement age,” the report said.
According to the IMF, the fact that debt is rising rapidly in many of the countries in the
region is a cause for concern.
Gulf countries, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates experienced a shrinkage of 0.2% last year.
For Saudi Arabia, the decline was 0.7%. This year it is expected that it will grow again.
© NTB scanpix / #Norway Today