Economies in the Middle East and North Africa (MENA) region are expected to grow more slowly in 2023, as double-digit food price increases put additional pressure on poor households, and food insecurity food could affect several generations, according to the latest World Bank report on the region, published Thursday, April 6, 2023.
ACCORDING TO THE REPORT, THE GROWTH RATE IN TUNISIA WILL BE AT THE LEVEL OF 2.3% IN 2023 AND 3% IN 2024, AGAINST 2.5% DURING 2022.
Entitled “Destroyed Fates: Long-Term Effects of Higher Prices and Food Insecurity in the Middle East and North Africa Region”, the MENA Economic Brief forecasts a decline in regional GDP of 5 .8% in 2022 to 3% in 2023.
According to the report, the growth rate in Tunisia will be at the level of 2.3% in 2023 and 3% in 2024, against 2.5% during the past year.
Regarding the growth rate of GDP per capita, it will increase from 1.8% in 2022, to 1.4% in 2023, to climb to 2.1% in 2024.
In addition, the World Bank expects an improvement in the level of the budget deficit for Tunisia, during the 2023 and 2024 financial years, respectively at -4.6% and -3.4% of GDP, while it reached , in 2022, -6.6% of GDP.
As regards the current account deficit, it should remain at high levels, i.e. -8% of GDP in 2023 and -8.4% of GDP in 2024, against -8.5% of GDP in 2022.
Egypt, Morocco and Tunisia: Higher levels of inflation, due to currency depreciation
According to the WB, countries such as Egypt, Morocco and Tunisia have experienced higher levels of inflation, largely due to the depreciation of their currencies against the dollar (between March and December 2022, the national currency of Egypt depreciated by 32.2%, that of Morocco by 7.4% and that of Tunisia by 5.8%).
“It is especially in oil-importing countries, such as Egypt, Morocco and Tunisia, that currency depreciations against the dollar have led to higher levels of inflation…The current accounts of these countries have been battered by rising food and oil prices, most of which are imported. This shock coincided with high debt levels and a deterioration in the global financial situation”.
According to data from household income and expenditure surveys in the West Bank and Gaza, Djibouti, Egypt, Iraq, Jordan, Morocco and Tunisia, households in the poorest quintile each count almost twice more people than households in the wealthiest quintile. As a result, the impacts of food insecurity are deep and long-lasting. Food insecurity can harm not only the current generation, but also the next generation. Some of its effects are irreversible.
Oil-exporting countries, which benefited from an oil bonanza in 2022, will see their growth slow, although there remains a significant gap between high-income countries and the rest of the region. Real GDP per capita growth, a better measure of living standards, is expected to slow to 1.6% in 2023, from 4.4% in 2022.
THE REPORT FINDS THAT THE AVERAGE FOOD INFLATION IN 16 MENA ECONOMIES BETWEEN MARCH AND DECEMBER 2022 WAS 29% YEAR-ON-YEAR
Inflation has increased dramatically in the region in 2022, particularly in countries whose currencies have depreciated. Having specifically analyzed the impact of rising food prices on food insecurity, the report finds that 8 out of 16 countries have recorded double-digit inflation or more, which hits poor households the hardest, because those ci devote a larger share of their budget to food than better-off households.
Food insecurity will have long-term consequences across multiple generations
“Food insecurity will have long-term, multi-generational consequences that will unfortunately limit the prospects of many, many young people,” said Ferid Belhaj, World Bank Vice President for the MENA region. The human and economic cost of inaction is enormous, and bold policies are needed in a region where young people make up more than half of the population,” he adds.
The semi-annual report reveals that the average food inflation in 16 MENA economies between March and December 2022 was 29% year-on-year. This was higher than headline inflation, which averaged 19.4% year-on-year over the same period, compared to 14.8% between October 2021 and February 2022, the month of the invasion. Ukraine by Russia.
In the four subgroups of the MENA region covered by the report – oil-importing developing countries, oil-exporting developing countries, conflict-affected countries and GCC countries – inflation contributes 24% to 33% to GDP growth. food insecurity predicted for 2023.
THE INCREASE IN FOOD PRICES FROM MARCH TO JUNE 2022 MAY HAVE INCREASED THE RISK OF CHILD STUNTING BY 17% TO 24% IN DEVELOPING COUNTRIES IN THE MENA REGION
“The report estimates that almost one in five people living in developing countries in the MENA region are likely to suffer from food insecurity during this year, and that around 8 million children under the age of 5 are part of the cohort that will face hunger. Even temporary food price inflation can cause long-term and often irreversible damage,” says Roberta Gatti, World Bank Chief Economist for the MENA region.
According to the report, the increase in food prices from March to June 2022 may have increased the risk of child stunting by 17% to 24% in developing countries in the MENA region, which represents approximately 200,000 to 285,000 newborns. additional. More generally, studies show that child malnutrition can lead to poor school performance, lower income and health problems later on.
“Research provides clear evidence that inadequate nutrition in utero and in infancy can disrupt children’s destinies and limit their prospects for prosperity,” adds Gatti.
MOTHERS COULD BENEFIT FROM MEASURES TO IMPROVE PARENTAL LEAVE PROVISIONS
Projected financing needs to address severe food insecurity run into the billions of dollars a year, but the report demonstrates that money alone is not enough. It, therefore, proposes means of action that could help alleviate food insecurity before it degenerates into a real crisis, including targeted transfers in cash and in-kind that could be put in place without delay to stem the situation. acute food insecurity. Mothers, who play a vital role both in utero and in early childhood, could benefit from measures to improve parental leave provisions, childcare and medical care, which are important for the development of the child.
The report highlights the need for more recent and better data on the health and nutritional status of children, as well as better access to administrative information that would help target priorities and reach vulnerable populations more easily. And to conclude that it is essential to increase the resilience of food systems and strengthen supply chains, in particular in the face of climate shocks and future market disruptions.
