Countries with unrest need more help' Arab central bankers

Arab countries hit by unrest may need more financial support from international institutions such as the International Monetary Fund in the short term as growth slows in the region, central bank governors said at a meeting.

The turmoil across the Middle East that has toppled the rulers of Tunisia, Egypt and Libya has also translated into slower economic growth, causing governments to hand out billions in an effort to create jobs and counter rising living costs.

The Arab central bank governors “expressed their fears from an expected drop in growth rates this year,” they said after meeting in Qatar’s capital.

Yemen’s central bank governor, Mohamed bin Humam, said his country’s political crisis may cause the economy to shrink this year after eight months of unrest.

“I don’t know how much. We don’t have such data from the real sectors so we can’t assume, but it could be negative. It is difficult to tell without having such data for that,” Humam said.

The IMF forecast in April that economic growth in Yemen, where some 40 percent of its 23 million people live on less than $2 per day, would slow to 3.4 percent in 2011.

The central bankers said they planned to call for more short-term financial support for Arab countries hit by unrest at the IMF and World Bank meetings being held next week in Washington.

“They affirmed ... especially ... the importance of securing more financial support from international institutions in the short term to contribute to reaching a complete financial stability in Arab countries affected by the latest events,” the governors said in a statement.

Group of Eight finance chiefs pledged $38 billion last week in financing to Tunisia, Egypt, Morocco and Jordan over 2011-13, widening a deal agreed in May and offering Libya the chance to partake, too.