The rapid spread of the coronavirus in the region means that plans to lift lockdowns have come later than in many other EMs and the damaging economic effects of social distancing have persisted. The Gulf economies have also suffered from the effects of lower oil prices, although pressure on dollar pegs has eased as policymakers have stepped up fiscal austerity measures. Elsewhere, the shutdown of tourism sectors and a collapse in external demand has taken its toll on North Africa, prompting Egypt, Morocco, and Tunisia to turn to the IMF. The economic turmoil in Algeria and Lebanon has only got worse and, with no financial support in place, even sharper and more disorderly adjustments remain a key risk.
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