The International Monetary Fund published a speech by Managing Director Kristalina Georgieva setting out a fiscal reform agenda for Arab economies, centred on rebuilding fiscal buffers, improving the efficiency of public spending and strengthening fiscal institutions amid higher uncertainty and rising debt vulnerabilities. The remarks emphasised credible medium-term fiscal frameworks, stronger domestic revenue mobilisation and reforms to shift the state’s role toward enabling private-sector-led growth, alongside continued support for countries emerging from conflict. The speech cited projections for global growth of 3.3 percent in 2026 and 3.2 percent in 2027, with inflation expected at 3.8 percent in 2026 and 3.4 percent by 2027, while growth in the Arab region was expected to rise to 3.7 percent in 2026. Key risks highlighted included geopolitical and trade tensions, oil price volatility and potential supply-demand imbalances from unwinding OPEC+ production cuts, overly optimistic assumptions about AI-driven productivity gains, and debt levels projected to reach unprecedented levels. The reform priorities differentiated between oil exporters managing price volatility while diversifying, oil importers building fiscal buffers and credible frameworks to reduce exposure to global financing conditions, and low-income and fragile economies needing macroeconomic stabilisation and access to external financing including debt relief; the speech also referenced IMF analysis suggesting a tax-to-GDP ratio of at least 15 percent to support strong institutions, deeper financial markets and sustained growth. A forthcoming IMF book on Middle East and North Africa taxation will outline policy options to raise revenues, and the IMF signalled continued support through integrated policy advice, financing and capacity development, including via its Fiscal Affairs Department and regional capacity development hubs.
International Monetary Fund 2026-02-02
International Monetary Fund Managing Director urges Arab economies to rebuild fiscal buffers and spend more efficiently
IMF Managing Director Kristalina Georgieva outlined a fiscal reform agenda for Arab economies, focusing on rebuilding fiscal buffers, enhancing public spending efficiency, and strengthening fiscal institutions amid rising debt vulnerabilities. She emphasized the need for credible fiscal frameworks, domestic revenue mobilisation, and reforms to enable private-sector growth, with IMF support through policy advice, financing, and capacity development.