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IMF chief urges Arab states to slash spending

DUBAI (AFP-Jiji) — IMF chief Christine Lagarde on Saturday urged Arab countries to slash public wages and subsidies in order to rein in spending, achieve sustainable growth and create jobs.

Speaking at the one-day Arab Fiscal Forum in Dubai, Lagarde welcomed “promising” reforms adopted by some Arab countries, but insisted much more was needed to overcome daunting economic and social problems.

Low oil prices are weighing on the finances of Arab oil exporters, while importers are battling with rising debt, unemployment, conflicts, terrorism and refugee inflows, the International Monetary Fund’s managing director said.

Almost all Arab countries have posted budget deficits over the past few years and Arab economies grew at just 1.9 percent last year, half the global rate, according to the Arab Monetary Fund (AMF), which co-organized the event with the IMF.

Yet Arab public spending remains very high, especially in oil-rich Gulf states, where government expenditures exceed 55 percent of gross domestic product, Lagarde said.

She said many Arab governments had taken steps to contain spending, but the measures have often been temporary.Speech

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