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North Africa Inflation Slowing Growth: World Bank

FILE - A woman shops at a fruit and vegetable market in Cairo, Egypt, March 22, 2022.
FILE - A woman shops at a fruit and vegetable market in Cairo, Egypt, March 22, 2022.

DUBAI - Double-digit food price inflation will weigh on the Middle East and North Africa (MENA) region this year, causing growth to slow to 3% from 5.8% last year, the World Bank said in a regional report on Thursday.

The new forecast is a downward revision to the 3.5% growth rate for 2023 forecast in its October report.

The World Bank sees GDP per capita growth, a proxy for living standards, slowing to 1.6% in 2023 from 4.4% in 2022.

Developing oil exporters, including Algeria, are forecast to grow at 2.2% in 2023, down from 3.9% in 2022.

Excluding Egypt, developing oil importers such as Tunisia are expected to grow by 2.8% in 2023 and 3.1% in 2024.

Egypt is forecast to have a relatively high expected growth of 4% for 2023 and 2024.

The World Bank forecast 3.1% growth across the region in 2024.

The impact of higher food prices is estimated to increase the risk of childhood stunting by 17%-24% in developing MENA countries - equal to around 200,000 to 285,000 newborns at risk of stunting, the report said.

"Close to one out of five people living in developing countries in MENA is likely to be food insecure this year," said World Bank MENA Chief Economist Roberta Gatti.

The report was compiled before surprise OPEC+ oil output cuts were announced on Sunday, which have driven up oil prices and price expectations, which economists say will add costs that could push up inflation.

The World Bank said its projections do not incorporate any impact from that decision.