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Estimating Potential Growth in the Middle East and Central Asia
Author:
Ms. Pritha Mitra
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,
Amr Hosny
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,
Gohar Abajyan
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, and
Mr. Mark Fischer
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Series:
IMF Working Papers
Volume/Issue:
Volume 2015: Issue 062
Language:
English
Publication Date:
20 Mar 2015
DOI:
https://doi.org/10.5089/9781475545364.001
ISBN:
9781475545364
ISSN:
1018-5941
Pages:
27
Keywords:
WP; oil importer; exporter; importer; oil exporter; physical capital; potential growth; productivity; output gap; production function; Middle East; Central Asia.; HP filter; physical capital accumulation; CCA oil importer; production function approach; IMF staff estimate; MENAP region; Oil; Total factor productivity; Global financial crisis of 2008-2009; Oil prices; Global; Middle East and Central Asia; central Asia1; growth in the Middle East; growth estimate; copyright page
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The Middle East and Central Asia’s economic growth potential is slowing faster than in other emerging and developing regions, dampening hopes for reducing persistent unemployment and improving the region’s generally low living standards. Why? And is it possible to alter this course? This paper addresses these questions by estimating potential growth, examining its supply-side drivers, and assessing which of them could be most effective in raising potential growth. The analysis reveals that the region’s potential growth is expected to slow by ¾ of a percentage point more than the EMDC average over the next five years. The reasons behind this slowdown differ across the region. Lower productivity growth drives the slowdown in the Caucasus and Central Asia and is also weighing on growth across the Middle East (MENAP); while a lower labor contribution to potential growth is the main driver in MENAP. Moving forward, given some natural constraints on labor, total factor productivity growth is key to unlocking the region’s higher growth potential. For oil importers, raising physical capital accumulation through greater investment will also play an important role.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund