Maait says IMF studies will shape upcoming program evaluations

The IMF is assessing how the war in the Gulf could impact countries with existing loan programs, including Egypt and Jordan, IMF Arab States and Maldives Executive Director and former Finance Minister Mohamed Maait tells EnterpriseAM. The exercise will inform the fund’s upcoming evaluations of existing programs, he said.

The nature of the IMF’s response is contingent on the scale and length of the shock. “The Fund will conduct in-depth studies to assess the impact,” Maait said, adding “these repercussions will be taken into account when evaluating economic conditions in light of existing programs.” He noted that any potential intervention would not be limited to Egypt, but could also extend to other program countries such as Jordan and Somalia.

Why it matters: Maait’s statements follow our report earlier this week that the government has entered early-stage talks with the IMF, World Bank, and AfDB to secure concessional financing to ease pressure on the state’s coffers. Officials in Cairo are reportedly talking to the fund about a potential emergency mechanism for member states impacted by the conflict.

Maait underscored the global significance of the Middle East and the Gulf region as a hub for oil, gas, and international trade, noting that the most immediate and direct impact is likely to be felt in gas and petroleum supplies and pricing. “These developments may reflect on the rising cost of food, raw materials, production, and financing, as well as the potential for investment outflows from the region, which could pressure exchange rates,” he warned.

The critical question, according to Maait, is whether inflationary pressures will prove temporary or evolve into a more sustained wave that necessitates a return to tighter monetary policy — not only in the region, but globally.