Middle East and Central Asia

 
The reports discuss recent economic developments and prospects for countries in the Middle East and Central Asia regions. They also address economic policy developments that have affected economic performance in the regions, and discuss key challenges faced by policymakers. they address regional policy developments and challenges, and provide country-specific data and analysis, including through analytical pieces on issues of interest to the regions.

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2023

October 12, 2023

Regional Economic Outlook for the Middle East and Central Asia, October 2023

Description:

Building Resilience and Fostering Sustainable Growth

Across the Middle East and Central Asia, the combined effects of global headwinds, domestic challenges, and geopolitical risks weigh on economic momentum, and the outlook is highly uncertain. Growth is set to slow this year in the Middle East and North Africa region, driven by lower oil production, tight policy settings in emerging market and middle-income economies, the conflict in Sudan, and other country-specific factors. In the Caucasus and Central Asia, although migration, trade, and financial inflows following Russia’s war in Ukraine continue to support economic activity, growth is set to moderate slightly this year.

May 3, 2023

Regional Economic Outlook for the Middle East and Central Asia

Description: The economies of the Middle East and Central Asia (ME&CA) proved resilient in 2022, despite a series of global shocks. However, this year—and potentially next—growth is expected to slow in the Middle East and North Africa (MENA) as tight policies to fight inflation, reduce vulnerabilities, and rebuild buffers start to dent economic activity in many countries, and agreed oil production cuts curb growth in oil exporters. Inflation is projected to remain persistent. The outlook for Caucasus and Central Asia (CCA) countries depends heavily on external factors, namely the impact of monetary tightening, growth in their main trading partners, the pace of private transfers, and inflows of migrants from Russia. Uncertainty is high, and risks to the baseline are tilted to the downside amid financial stability concerns—particularly in advanced economies amid contagion fears. Policy trade-offs are even more complex, and policymakers will need to calibrate the policy mix carefully to reduce core inflation without triggering financial stress and excessive tightening and continue to provide targeted fiscal support to vulnerable groups while preserving debt sustainability and financial stability. Tight monetary and fiscal policies across the region amid tight global financial conditions call for accelerating structural reforms to bolster potential growth and enhance resilience.

2022

October 12, 2022

Regional Economic Outlook for the Middle East and Central Asia, October 2022

Description: In a worsening global environment, economies in the Middle East and Central Asia (ME&CA) are being buffeted by a confluence of shocks: a global slowdown, high and volatile food and energy prices, faster and stronger-than-expected tightening of financial conditions, and the risk of fragmentation. The region’s emerging market and middle-income economies (EM&MIs) and low-income countries (LICs) are hit hard, with many facing curtailed access to market financing, while oil-exporting countries are being buffered by still-high energy prices. The adverse impact of Russia’s war in Ukraine on the Caucasus and Central Asia (CCA) has thus far been milder than expected. Still, the CCA’s strong ties to Russia entail substantial risks to the region’s outlook.

April 27, 2022

Regional Economic Outlook April 2022 Middle East Central Asia

Description: The war in Ukraine and sanctions on Russia are exacerbating the divergence in recovery prospects for the Middle East and Central Asia. Despite better-than-expected momentum in 2021, the economic environment in 2022 is defined by extraordinary headwinds and uncertainties, particularly for commodity importers, with higher and more volatile commodity prices, rising inflationary pressures, faster-than-expected monetary policy normalization in advanced economies, and a lingering pandemic.

2021

October 19, 2021

Regional Economic Outlook for the Middle East and Central Asia

Description: A fragile recovery continues in the Middle East and Central Asia region. The region has made good progress since the beginning of the year, but new challenges have emerged. They include a pandemic wave in countries with weak vaccination progress and rising inflation, which has contributed to declining monetary policy space, adding to the difficulties posed by limited fiscal policy space. Additionally, divergent recoveries and concerns about economic scarring persist. Inequities are also on the rise, and countries will need to tackle the pandemic’s impact on debt, labor markets, and the corporate sector. Countries will face difficult tradeoffs amid this challenging environment as they continue to manage the current crisis. Ramping up vaccine acquisition and distribution remains the most urgent short-term priority. Additional support should be well targeted, and central banks may need to raise interest rates if inflation expectations start to increase. Improving policy frameworks will be important to reduce policy tradeoffs. Preparing for a new chapter by investing in a transformational recovery will be vital to the region’s future. Important priorities include reorienting the role of the state toward health, education, and social safety nets; leveraging global trends like digitalization; and investing in climate-resilient technology.

April 11, 2021

Regional Economic Outlook: Trade-Offs Today for Transformation Tomorrow

Description: A year into the coronavirus (COVID-19) pandemic, the race between vaccine and virus entered a new phase in the Middle East and Central Asia region, and the path to recovery in 2021 is expected to be long and divergent. The outlook will vary significantly across countries, depending on the pandemic’s path, vaccine rollouts, underlying fragilities, exposure to tourism and contact-intensive sectors, and policy space and actions. Public gross financing needs in most emerging markets in the region are expected to remain elevated in 2021–22, with downside risks in the event of tighter global financial conditions and/or if fiscal consolidation is delayed due to weaker-than-expected recovery. 2021 will be the year of policies that continue saving lives and livelihoods and promote recovery, while balancing the need for debt sustainability and financial resilience. At the same time, policymakers must not lose sight of the transformational challenges to build forward better and accelerate the creation of more inclusive, resilient, sustainable, and green economies. Regional and international cooperation will be key complements to strong domestic policies.

2020

October 19, 2020

Regional Economic Outlook: Middle East and Central Asia

Description: Countries in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region and those in the Caucasus and Central Asia (CCA) responded to the COVID-19 pandemic with swift and stringent measures to mitigate its spread and impact but continue to face an uncertain and difficult environment. Oil exporters were particularly hard hit by a “double-whammy” of the economic impact of lockdowns and the resulting sharp decline in oil demand and prices. Containing the health crisis, cushioning income losses, and expanding social spending remain immediate priorities. However, governments must also begin to lay the groundwork for recovery and rebuilding stronger, including by addressing legacies from the crisis and strengthening inclusion.

July 13, 2020

Regional Economic Outlook Update: Middle East and Central Asia

Description: The Middle East and Central Asia (MCD) region has reacted to the global COVID-19 pandemic with swift and stringent measures that have saved lives. However, these policies have also had a large impact on domestic economic activity. With several countries in the region beginning reopening in past weeks, and a recent uptick in activity, rising infection numbers may pose risks. A sharp decline in oil prices together with production cuts among oil exporters and disruptions in trade and tourism added further headwinds. As a result, growth in the region is now projected at –4.7 percent in 2020, 2 percentage points lower than in April 2020. The unusually high level of uncertainty regarding the length of the pandemic and its impact on firm closures, the resulting downside risks (including social unrest and political instability), and potential renewed volatility in global oil markets dominate the outlook. The pandemic will continue to test countries’ health capacity and economic resilience. While ensuring strong health systems remains the immediate priority, governments should also focus on supporting the recovery and setting up resilient and well-targeted social safety nets. As the pandemic wanes, countries should facilitate recovery by easing the reallocation of workers and resources, as needed, while resuming gradual fiscal adjustment and rebuilding policy buffers. Multilateral support can play a key role in helping countries surmount these shocks.

April 15, 2020

Confronting the COVID-19 Pandemic in the Middle East and Central Asia

Description: Countries of the Middle East and Central Asia region have been hit by two large and reinforcing shocks, resulting in significantly weaker growth projections in 2020. In addition to the devastating toll on human health, the COVID-19 pandemic and the plunge in oil prices are causing economic turmoil in the region, with fragile and conflict affected states particularly hard-hit given already large humanitarian and refugee challenges and weak health infrastructures. The immediate priority for policies is to save lives with needed health spending, regardless of fiscal space, while preserving engines of growth with targeted support to households and hard-hit sectors. In this context, the IMF has been providing emergency assistance to help countries in the region during these challenging times. Further ahead, economic recoveries should be supported with broad fiscal and monetary measures where policy space is available, and by seeking external assistance where space is limited.

2019

October 28, 2019

Regional Economic Outlook: Middle East and Central Asia

Description: The impact on growth in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region from global headwinds remains muted thus far, while growth in the Caucasus and Central Asia (CCA) region is stable. However, growth is too low to meet the needs of growing populations, while risks to the outlook have increased. They include global trade uncertainties, volatile oil prices, geopolitical tensions, and domestic vulnerabilities in some countries.

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