The fund had predicted a cumulative budget deficit of more than $1tn by 2021 for nations in the region that had, before the collapse in prices, been flush with oil-wealth.

But thanks to a slight price rebound, and a number of decisive moves on behalf of nations to tighten their purse strings, the IMF now anticipates a collective deficit of just $765bn – a reduction of at least $235bn.

Masood Ahmed, director of the fund’s Middle East and Central Asia Department, explained the rationale behind the decision. Speaking over the weekend at the fund’s annual meetings in Washington DC, he applauded many countries “difficult decisions” to cut back spending, as well as to raise energy prices, including water in some cases, and to slash significant public sector wage bills.

But, he warned, the anticipated deficit is still “a substantial number” that raises “the challenge of additional action to cut back on spending and raise revenues in the meantime”.

In particular, Ahmed highlighted the Gulf Cooperation Council’s moves toward adopting a value-added tax, and Saudi Arabia’s “Vision 2030”, which aims to wean the country off oil with an ambitious diversification strategy.

Ahmed explained that as well as facing a substantial fiscal gap, MENA oil exporters face a “perhaps more complex challenge of weaning their economies off oil to make them more diversified and to create jobs for young people in the private sector”.

In many such countries, the public sector has been the primary employer in the past. Like Saudi Arabia, he said many governments had plans to change this going forward.

It was important to get on with this, he said, “because otherwise, if you just look at the numbers of the next five years, some little over two million young people are likely to join the labour force in these countries and almost half of them risk becoming unemployed unless we can accelerate the pace of job creation in the private sector,” Ahmed said.

The challenge will be compounded by the fact that non-oil sector growth is expected to slow in the coming years, as government efforts to cut budgets and raise revenues hit private confidence.

In the GCC for example, non-oil growth has already fallen below 2% to 1.8% this year. According to Ahmed, the IMF believes there will be substantially less non-oil growth than there had been in the five years up to 2015. However, it hopes the effect will lessen as fiscal consolidation strategies ease.

Oil importers in MENA, on the other hand, are benefiting from lower prices. Growth rates on average for this group of countries are expected to be 3.5% this year and over 4% in 2017.

This group of nations’ growth is still not enough to “make a dent” in high youth unemployment, which sits at 25-30%, Ahmed noted.

Elsewhere in the region, countries are facing even graver threats, with intense conflicts in countries like Syria, Iraq, Libya and Yemen.

Ahmed said the “immediate and most devastating” costs of these have been human, and that “dealing with that is going to be a prerequisite to really putting in place a different trajectory for the economic outlook for these countries”.

He also covered central Asia, where the fall in oil prices has again put growth at its lowest rate in nearly two decades – 1.3%.

“And if you look at the projections of growth, what we see is a recovery that is even slower and more gradual than the one that happened after the global financial crisis eight years ago, or the Russian crisis in 1998,” Ahmed noted.

He praised the measures taken by nations in the region already, but said fiscal space needed to be used to maximise growth, and management policies needed to be strengthened alongside those covering surveillance and crisis management. This was particularly the case in regard to the financial sector.

Finally, he said structural measures to improve competitiveness would be key to raising standards in the medium term.