Tunisia’s reliance on European countries for export earnings, tourism, remittances, and foreign direct investment inflows has remained high over the last decades. Remittances and tourism receipts have been broadly stable in percent of GDP, with somewhat more fluctuations in the latter caused in part by identifiable political events that harmed tourism in the region. Tunisia’s annual growth rate appears to have become increasingly synchronized over time with the annual growth rate of its main European trading partners.
The paper characterizes trade exposure and regional integration in six ASEAN economies during 1997-2008. For this, the paper uses the 2000 Asian Input Output Tables which are extrapolated using National Income Accounts and COMTRADE data. On the demand side, the paper shows that the level and geographical nature of external exposure varies across the ASEANs, and has changed over time. In particular, there was a shift in the external demand exposure of ASEANs from mature markets, including the United States, to China and ROW. In addition, the share of China in East Asia’s final demand, especially investment, rose sharply while that of Japan fell. On the supply side, the paper documents the rise of China into a “global factory” and the steady shift in regional production and integration from Japan and the United States to China.
The estimated spillover of the global crisis to emerging market (EM) economies in the Middle East and North Africa (MENA) indicates that nearly two-thirds of the increased financial stress in MENA EM countries after the Lehman shock is attributable to direct or indirect spillovers of financial stress in advanced economies. Moreover, the estimated models suggest that the increased financial stress and slowdown in economic activity in advanced economies can explain about half of the drop in real GDP growth in MENA EM countries after the Lehman shock.
This 2008 Article IV Consultation highlights that Tunisia’s sound economic policies and pragmatic approach to structural reforms continue to bear fruit, as evidenced by strong growth and improved social indicators. Real GDP growth averaged 5 percent a year while the macroeconomic and financial position strengthened substantially during the past decade. The short-term outlook is encouraging despite the challenging international environment. The fiscal deficit is projected to remain at 3 percent of GDP. The medium-term outlook remains favorable with growth projected at above 6 percent sustained by strong foreign direct investment.
The methodological soundness of statistics in Tunisia is consistent in several areas with outdated international statistical standards. The Central Bank of Tunisia (BCT) is responsible for the collection, processing, and dissemination of monetary and balance of payments statistics. The accuracy and reliability of statistics in Tunisia are broadly adequate. Adequate national accounts data and some brief methodological notes are disseminated, albeit with no analyses accompanying the data. However, there is now a need to proceed quickly with the migration to the new standards.
Based on data collected on a wide range of financial sector indicators, new indices of financial development for countries in the Middle East and North Africa (MENA) are constructed, encompassing six themes: development of the monetary sector and monetary policy, banking sector development, nonbank financial development, regulation and supervision, financial openness, and institutional quality. The paper finds that the degree of financial development varies across the region. Some countries have relatively well-developed banking sectors and regulatory and supervisory regimes. However, across the region, more needs to be done to reinforce the institutional environment and promote nonbank financial sector development. Based on a subset of indicators, the MENA region is found to compare favorably with a few other regions, but it ranks far behind the industrialized countries and East Asia.
Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s and there is evidence of renewed weakness. The appropriate policy response to a terms of trade shock depends importantly on whether the shock is perceived to be temporary or permanent. Our results indicate that the recent weakness in commodity prices is mostly of a secular nature, stressing the need for commodity exporting countries to concentrate on export diversification and other structural policies. There is, however, scope for stabilization funds and the use of hedging strategies since the evidence also suggests commodity prices have become more volatile.