Social Spending in Middle East Is Still Lagging Peers, IMF Says

(Bloomberg) -- Social spending in the Middle East still lags global peers in terms of volume and efficacy despite significant progress, according to the International Monetary Fund.

“Education, health, and poverty indicators in the Middle East and Central Asia have improved substantially over the past two decades,” the IMF said in a report on Tuesday. “The rate of progress, however, has slowed, and these indicators remain weaker than in global peers. The level of social spending also is lower, though to a lesser degree.”

According to IMF calculations, governments in the Middle East and Central Asia devote an average of 10.4% of their gross domestic product to social spending, compared to an emerging-market average of 14.2%.

Countries “have room to improve in terms of the effectiveness with which social spending delivers improvements in socioeconomic outcomes,” according to the IMF, which said better use of money could go a long way to closing gaps with peers.

The Covid-19 experience, according to the fund, provided a valuable lesson on prioritizing expenditure and improving spending efficiency. “The crisis has forced a swift and concerted national and multilateral response to ensure adequate public spending on health and social protection, so as to cushion the human and economic toll,” it said.

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