The speeches made by officials attending the IMF–World Bank Annual Meetings are published in this volume, along with the press communiqués issued by the International Monetary and Financial Committee and the Development Committee at the conclusion of the meetings.
International Monetary Fund. Middle East and Central Asia Dept.
MENAP oil exporters have benefited from high oil prices, which have provided a boost to economic activity, directly and indirectly, through the fiscal space that has facilitated additional spending in 2011–12. Accommodative fiscal and monetary policies remain appropriate in most countries in light of the still-fragile recovery, the modest rebound in credit growth, and the lack of signs of overheating. Over the longer horizon, fiscal and monetary policy should be redesigned to enhance the ability to smooth consumption and absorb shocks, safeguard long-term sustainability, and bolster financial stability. Structural reforms should aim to boost diversification, generate employment, and increase access to economic opportunities.
Against the backdrop of lower commodity prices and a less-supportive global environment, economic activity in sub-Saharan Africa has decelerated sharply. The region’s output is only expected to expand by 1.4 percent in 2016, the worst growth performance in more than 20 years, and the loss in momentum over the last two years has been on par with the deep slowdowns of previous decades (Figure 1.1). While a modest recovery is in the cards for next year, to slightly less than 3 percent, even this will only be feasible provided there is prompt action to address the significant macroeconomic imbalances and heightened policy uncertainty prevalent in several of the region’s largest economies.
Sub-Saharan Africa continues to record strong economic growth, despite the weaker global economic environment. Regional output rose by 5 percent in 2011, with growth set to increase slightly in 2012, helped by still-strong commodity prices, new resource exploitation, and the improved domestic conditions that have underpinned several years of solid trend growth in the region’s low-income countries. But there is variation in performance across the region, with output in middle-income countries tracking more closely the global slowdown and with some sub-regions adversely affected, at least temporarily, by drought. Threats to the outlook include the risk of intensified financial stresses in the euro area spilling over into a further slowing of the global economy and the possibility of an oil price surge triggered by rising geopolitical tensions.
As elsewhere, exchange rate regimes in sub-Saharan African countries vary greatly, and have evolved over time. Recent IMF work on exchange rate regimes suggests that there is no single prescription, and that the appropriate regime for a country depends on the macroeconomic challenges facing the country and its particular circumstances (see Ghosh, Ostry, and Tsangarides 2010). The exchange rate regime in turn has bearing on economic outcomes, but alongside other macroeconomic policies as well as the strength and depth of institutions.