Global reinsurer Swiss Re expected real GDP in emerging markets (EM) to contract by 0.5% in 2020 due to the coronavirus crisis. It forecast economic activity in EMs to expand by a compound annual growth rate (CAGR) of 4.4% in the 2021-30 period, compared to a CAGR of 5.5% in the previous decade, due to a weak global economic backdrop. It pointed out that, despite the implementation of fiscal stimuli across EMs to cushion the economic impact of the coronavirus, risks to the growth outlook are to the downside. As such, it considered that investments in infrastructure are crucial to improve productivity in EMs and increase the latter's resiliency. It considered that spending on public infrastructure has a higher multiplier effect on economic growth than other fiscal measures, such as tax cuts or direct welfare payments. It added that the COVID-19 pandemic has demonstrated the urgent need for more investment in healthcare infrastructure as well as in infrastructure that secures supply chains.
It anticipated that EMs will invest annually $2.2 trillion, or the equivalent of 3.9% of GDP, in infrastructure during the 2021-40 period, driven by economic growth, urbanization, the digitization of cities, and climate change. However, it estimated infrastructure needs in EMs at $2.7 trillion annually during the 2021-40 period, which will result in an infrastructure investment gap of $520bn annually. It expected most EM investments to be in the energy and transportation sectors. 

Swiss Re pointed out that the public sector usually finances 75% of infrastructure investments in EMs, while the private sector covers the remaining 25%. But it considered that national budgets will remain under pressure and that governments will prioritize short-term needs. As such, it anticipated that the private sector will also finance 75% of the existing infrastructure investment gap, raising the total share of the private sector to 35% of the total funding for infrastructure projects. As a result, it estimated the investment opportunities in infrastructure for the private sector in EMs at $920bn per year in the 2021-40 period. 
Source: Swiss Re

The World Bank estimated that the conflict in Syria has reduced the annual average real GDP growth by 1.2 percentage points in Iraq, by 1.6 percentage points in Jordan and by 1.7 percentage points in Lebanon between 2011 and 2018. It noted that the negative impact of the conflict was transmitted through several channels, predominantly through the transit trade across Syria and from service exports such as tourism. It estimated that the conflict increased Iraq's public debt by 23.4% of GDP and Lebanon's public debt by 58% of GDP in the 2011-19 period, as it said that the public debt ratio would have reached 26% of GDP in Iraq and 97% of GDP in Lebanon at the end of 2019 in the absence of the conflict. In contrast, it noted that the public debt level in Jordan would have followed the same trajectory even in the absence of the conflict. In parallel, the World Bank considered that any positive impact on the three economies from a modest recovery in Syria will come from regional stability, rather than from immediate economic opportunities related to the reconstruction of Syria. It estimated the spillover effect at between 0.2 and 0.9 percentage points of additional GDP growth annually in neighboring countries depending on security improvements and the restoration of services in Syria in the next five years. It pointed out that Iraq, Jordan and Lebanon are all net importers of the main materials needed for reconstruction, which implies low direct export opportunities for the three countries.
Source: World Bank

The International Monetary Fund indicated that Sudan requested a 12-month staff-monitored program to support the implementation of its comprehensive homegrown reform package. It said that the Sudanese economy is facing overwhelming social and economic challenges. It projected real GDP to shrink by 8% in 2020, following a 2.5% contraction in 2019, due to the COVID-19 outbreak. It said that the reform package will focus on stabilizing the economy, laying the foundation for strong and inclusive growth, reducing fiscal and external deficits, containing the inflation rate, as well as improving governance and the business environment. In addition, it noted that authorities aim to increase domestic revenues and reform energy subsidies to allow for higher social spending to help mitigate the impact of the fiscal adjustments and address the fallout of the pandemic. Also, it noted that the inflation rate reached 114% in May 2020, while the Sudanese pound continues to depreciate rapidly. As such, it considered that the implementation of prudent monetary policy and exchange rate reforms, as intended under the reform program, would reduce the inflation rate, boost external competitiveness, and support the economic recovery. Further, the IMF encouraged the authorities' efforts to solicit international partners to mobilize needed financing for the reform program. It noted that Sudan's debt burden exceeded 190% of GDP at the end of 2019, and that the majority of the debt is in arrears. It stressed that authorities should step up efforts towards debt relief under the Heavily Indebted Poor Country initiative. 
Source: International Monetary Fund