- International Monetary Fund. Middle East and Central Asia Dept.
- Published Date:
- October 2011
©2011 International Monetary Fund
Second printing (revised), November 2011
Regional economic outlook. Middle East and Central Asia. – Washington, D.C. :
International Monetary Fund, 2004-
v.; cm. – (World economic and financial surveys, 0258-7440)
Twice a year.
Began in 2004.
Some issues have also thematic titles.
1. Economic forecasting – Middle East – Periodicals. 2. Economic forecasting – Asia, Central – Periodicals. 3. Middle East – Economic conditions – Periodicals. 4. Asia, Central – Economic conditions – Periodicals. 5. Economic development – Middle East – Periodicals. 6. Economic development – Asia, Central – Periodicals. I. Title: Middle East and Central Asia. II. International Monetary Fund. III. Series: World economic and financial surveys.
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The Middle East and Central Asia Regional Economic Outlook (REO) is prepared biannually by the IMF’s Middle East and Central Asia Department (MCD). The analysis and projections contained in the MCD REO are integral elements of the Department’s surveillance of economic developments and policies in 30 member countries. It draws primarily on information gathered by MCD staff through their consultations with member countries.
The analysis in this report was coordinated under the general supervision of Masood Ahmed (Director of MCD). The project was directed by Ratna Sahay (Deputy Director in MCD) and Paul Cashin (Chief of MCD’s Regional Studies Division).
The primary contributors to this report are Yasser Abdih, Adolfo Barajas, and Padamja Khandelwal. Other contributors include Ahmed Al-Darwish, Alberto Behar, Anna Bordon, Paul Cashin, Serhan Cevik, Ralph Chami, Joshua Charap, Lisa Dougherty-Choux, Christine Ebrahimzadeh, Moataz El Said, Jaime Espinosa Bowen, Harald Finger, José Gijón, Mark Horton, Nadeem Ilahi, Daehaeng Kim (of the IMF’s European Department), Jiwon Kim, Annette Kyobe, Lucy Qian Liu, Alina Luca, Amine Mati, Ananthakrishnan Prasad, Pedro Rodriguez, Agustín Roitman, Axel Schimmelpfennig, Nia Sharashidze, and Younes Zouhar.
Jaime Espinosa Bowen and Gohar Abajyan provided research assistance and managed the database and computer systems, with support from Kamal Krishna, Arthur Ribeiro, Hirut Wolde, and Chunfang Yang. Sanaa Farid and Deven Thead were responsible for word processing and document management. Christine Ebrahimzadeh and Kia Penso edited the manuscript and managed the production of the publication in close collaboration with Michael Harrup of the External Relations Department.
Assumptions and Conventions
A number of assumptions have been adopted for the projections presented in the Regional Economic Outlook: Middle East and Central Asia. It has been assumed that established policies of national authorities will be maintained; that the price of oil1 will average US$103.20 a barrel in 2011 and US$100.00 in 2012; and that the six-month London interbank offered rate (LIBOR) on U.S.-dollar deposits will average 0.4 percent in 2011 and 0.5 percent in 2012. These are, of course, working hypotheses rather than forecasts, and the uncertainties surrounding them add to the margin of error that would in any event be involved in the projections. The 2011 and 2012 data in the figures and tables are projections. These projections are based on statistical information available through early September 2011.
The following conventions are used in this publication:
In tables, ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor discrepancies between sums of constituent figures and totals are due to rounding.
An en dash (–) between years or months (for example, 2010–11 or January–June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2010/11) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2011).
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points (bps)” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.1Simple average of prices of U.K. Brent, Dubai, and West Texas Intermediate crude oil.
Country and Regional Groupings
The October 2011 Regional Economic Outlook: Middle East and Central Asia (REO), covering countries in the Middle East and Central Asia Department (MCD) of the International Monetary Fund (IMF), provides a broad overview of recent economic developments in 2011 and prospects and policy issues for 2012. To facilitate the analysis, the 30 MCD countries covered in this report are divided into two groups: (1) countries of the Middle East, North Africa, Afghanistan, and Pakistan (MENAP)—which are further subdivided into oil exporters and oil importers; and (2) countries of the Caucasus and Central Asia (CCA). The country acronyms used in some figures are included in parentheses.
MENAP oil exporters1 comprise Algeria (ALG), Bahrain (BHR), Iran (IRN), Iraq (IRQ), Kuwait (KWT), Libya (LBY), Oman (OMN), Qatar (QAT), Saudi Arabia (SAU), Sudan (SDN), the United Arab Emirates (UAE), and Yemen (YMN).
MENAP oil importers comprise Afghanistan (AFG), Djibouti (DJI), Egypt (EGY), Jordan (JOR), Lebanon (LBN), Mauritania (MRT), Morocco (MAR), Pakistan (PAK), Syria (SYR), and Tunisia (TUN).
MENA comprises Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, Mauritania, Morocco, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the United Arab Emirates, and Yemen.
MENA oil importers comprise Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Syria, and Tunisia.
The GCC (Gulf Cooperation Council) comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
The Maghreb comprises Algeria, Libya, Mauritania, Morocco, and Tunisia.
The Mashreq comprises Egypt, Jordan, Lebanon, and Syria.
CCA countries comprise Armenia (ARM), Azerbaijan (AZE), Georgia (GEO), Kazakhstan (KAZ), the Kyrgyz Republic (KGZ), Tajikistan (TJK), Turkmenistan (TKM), and Uzbekistan (UZB).
The CIS (Commonwealth of Independent States) comprises Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, the Kyrgyz Republic, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. Georgia and Mongolia, which are not members of the CIS, are included in this group for reasons of geography and similarities in economic structure.1 Because of the uncertain economic situation, Libya is excluded from the projection years of REO aggregates. For Sudan, projections for 2011 and 2012 exclude South Sudan.
World Economic Outlook1
The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing. Global growth is projected to moderate to about 4 percent through 2012 from over 5 percent in 2010. Real GDP in advanced economies, and emerging and developing economies, is expected to expand by about 2 percent and 6 percent, respectively (see table).
|Year over Year|
|Of which: United States||3.0||1.5||1.8|
|Emerging and developing economies||7.3||6.4||6.1|
|Of which: MENAP||4.4||3.9||3.7|
|Commonwealth of Independent States||4.6||4.6||4.4|
|Of which: Russia||4.0||4.3||4.1|
|World trade volume (goods and services)||12.8||7.5||5.8|
Simple average of prices of U.K. Brent, Dubai, and West Texas Intermediate crude oil. The average price of oil in U.S. dollars a barrel was $79.03 in 2010; the assumed price based on future markets is $103.20 in 2011 and $100.00 in 2012.
Average (measured in U.S. dollars) based on world commodity export weights.
The slowdown reflects both anticipated and unanticipated developments. The strong cyclical rebound in global industrial production and trade in 2010 was never expected to persist. However, in crisis-hit advanced economies, especially the United States, the handover from public to private demand is taking more time than anticipated. In addition, sovereign debt and banking sector problems in the euro area have proven much more tenacious than expected. Furthermore, disruptions resulting from the Tohoku earthquake and tsunami in Japan, as well as the spreading unrest in the Middle East and North Africa (MENA) and the related surge in oil prices, were major surprises.
Emerging and developing economies performed broadly as forecast, with considerable variation across regions. Activity began to rebound fairly strongly in the crisis-hit economies of central and eastern Europe and the Commonwealth of Independent States, in the latter helped by buoyant commodity prices. Surging commodity prices also propelled Latin America to high growth rates. Activity in developing Asia weakened modestly in response to global supply chain disruptions and destocking in the face of more uncertain demand from advanced economies. Sub-Saharan Africa continued to expand at a robust pace. By contrast, economic activity in the MENA region suffered from political and social conflict, although strong revenues boosted the economies of oil exporters.
Risks are clearly to the downside, with two warranting particular attention: that the crisis in the euro area may run beyond policymakers’ control and that activity in the United States, already softening, might suffer further blows. The uneven nature of the expansion and the many risks that threaten activity are symptomatic of a global economy that continues to struggle to accomplish the two rebalancing acts identified in earlier issues of the World Economic Outlook. First, private demand must take over from public demand. On this front, many economies have made considerable progress, but the major advanced economies lag behind. Second, economies with large external surpluses must rely increasingly on domestic demand, whereas those with large deficits must do the opposite. Key advanced and emerging economies need to strengthen their policies to advance rebalancing and hedge against the many downside risks.
Adopting growth-friendly medium-term fiscal consolidation programs in advanced economies, policies to rebalance demand in emerging market surplus economies, and structural reforms to boost potential growth everywhere could provide a considerable fillip to global GDP. To ensure that trade remains supportive of the global recovery, policymakers must continue to resist protectionist pressure. Achieving this will require that policymakers tackle difficult political economy challenges at home and resuscitate the strong collaborative spirit that prevailed at the height of the global financial crisis.
See IMF, World Economic Outlook and Global Financial Stability Report (both September 2011) for more information.