IMF outlines three priorities to address Middle East crisis risks

Photo: IMF

BAKU, Azerbaijan, October 15. The IMF’s recommendations for addressing the risks associated with the crisis in the Middle East focus on three key areas, the Director of the Middle East and Central Asia Department at the International Monetary Fund, Jihad Azour said during a briefing, Trend's correspondent reports.

“First, it is necessary to continue prioritizing price stabilization while ensuring the sustainability of public finances. Amid mounting inflationary pressures, monetary policy must remain the primary tool for curbing inflation. A tighter monetary policy and restrictions on liquidity must be complemented by a balanced fiscal and tax policy, especially in countries with limited scope for increasing government spending,” he noted.

Second, according to Azour, it is necessary to rebuild budget reserves.

“This is particularly important given the ongoing risks of a worsening economic situation. To this end, countries should improve the efficiency of domestic revenue mobilization, optimize government spending, and strengthen fiscal and financial mechanisms,” he explained.

Azour believes that governments should refrain from introducing large-scale subsidies and instead provide assistance to the hardest-hit segments of the population through targeted, temporary cash payments that do not increase the budget deficit.

“Third, countries need to continue strengthening their ability to withstand future shocks. Recent experience has once again confirmed the importance of reliable economic policy mechanisms. Countries with strong institutions, credible monetary policy frameworks, independent central banks, and sufficient fiscal reserves are generally better prepared to mitigate the effects of external shocks,” he added.