Regional Economic Outlook: Middle East and Central Asia, October 2014 -- Table of Contents
Middle East and Central Asia, October 27, 2014
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- Published: October 27, 2014
- Series: Middle East and Central Asia
Overview
- Prepared annually by the IMF's Middle East and Central Asia Department (MCD).
- Analysis and projections cover 31 member countries.
- Draws primarily on information gathered by MCD staff through their consultations with member countries.
- Full Text PDF: MCD reo October 2014.
- Regional snapshot:
- Economic developments in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) reflect diverse conditions across the region.
- Most high-income oil exporters, primarily in the GCC, record steady growth and solid economic and financial fundamentals, albeit with medium-term challenges.
- Iraq, Libya, Syria are mired in conflicts with humanitarian and economic consequences.
- Many oil importers show continued but uneven progress amid political transitions and difficult social conditions.
- In most of these countries, without extensive economic and structural reforms, economic prospects for the medium term remain insufficient to reduce high unemployment and improve living standards.
I. MENAP Oil Exporters: Increasing Diversification, Reducing Reliance on Oil-Funded Spending
- Key findings and projections:
- Intensified conflicts in Iraq and Libya have led to a downward revision in the 2014 growth projections for the MENAP oil exporters by ¾ of a percentage point compared with the May 2014 Regional Economic Outlook Update.
- At 2½ percent, growth in the oil exporters is expected to edge up only slightly from last year.
- Growth is expected to strengthen to about 4 percent next year, assuming that security improves and oil production in non-GCC countries, particularly Libya and Iraq, recovers.
- In the current security environment, these projections are subject to heightened uncertainty.
- Declining oil revenues and rising government spending are weakening fiscal positions.
- Policy recommendations and priorities:
- Consolidation would build resilience against oil price declines and help countries share their oil wealth with future generations.
- Some non-GCC countries face the pressing need to draw on their savings over the near term to meet essential expenditures.
- Reducing dependence of sustained economic growth on rising oil prices requires structural reforms that promote economic diversification and inclusive growth.
- Chapter resources:
- Download Chapter 1
- Infographic highlights: Rising 2015 Growth Depends on Improving Security; Oil Price Risks Remain Balanced, but Geopolitical Risks Have Risen; Falling Oil Revenues and Rising Government Spending Are Weakening Fiscal Positions; Growth from Diversifi cation, Not Rising Oil Prices
II. MENAP Oil Importers: Slow Recovery and Modest Prospects Call for Reform
- Key findings and projections:
- Continued sociopolitical and security tensions, high public debt, and deep-rooted structural impediments dampen recovery.
- Growth expectations broadly unchanged from the May 2014 Regional Economic Outlook Update: 3 percent in 2014 and rising to 4 percent in 2015.
- Intensifying regional conflicts and rising geopolitical tensions augment downside risks.
- Policy recommendations and priorities:
- Clawing back inefficient generalized subsidies and rechanneling them to support growth through better-targeted social safety nets for the poor and growth-generating investment.
- Continued fiscal consolidation is needed to put public debt on a sustainable path and increase buffers for dealing with adverse shocks.
- Greater exchange rate flexibility, in some cases, would support the recovery and improve competitiveness.
- Beyond the near term, improved security and deep structural reforms—especially in education, the business environment, and labor market efficiency, supported by continued stabilization efforts and stepped-up international assistance—are needed to raise potential growth rates, create jobs, and improve living standards and inclusiveness.
- Chapter highlights:
- Fragile Confi dence Constrains Recovery
- Downside Risks Are Elevated
- Gradually Declining External and Fiscal Vulnerabilities
- Fiscal, Monetary, and Exchange Rate Policies: Going Beyond Macroeconomic Stability
- Lackluster Medium-Term Prospects
- Structural Transformation to Boost Growth
- International Support
III. Caucasus and Central Asia: Increased Risks Highlight Need for Reform
- Key findings and projections:
- Economic growth in the Caucasus and Central Asia (CCA) is expected to decline from 6.6 percent in 2013 to about 5.5 percent in 2014–15.
- The forecast is ¾ percentage point weaker than in the May 2014 Regional Economic Outlook Update, mainly because of negative spillovers from an economic slowdown and increased geopolitical risks in Russia and weaker domestic demand in a number of CCA countries.
- Inflation pressures are rising because of weakened exchange rates.
- Risks are tilted to the downside; a deeper or more protracted Russian slowdown could further weaken remittances, exports, and investment.
- Policy recommendations and priorities:
- Over the near term, countries should stand ready to tighten monetary policy if inflation pressures persist.
- A pause in fiscal consolidation is justifiable in some cases in response to weaker growth prospects.
- Medium-term priorities: build credible anchors for monetary policy, introduce greater exchange rate flexibility to buffer against shocks, and pursue growth- and equity-friendly fiscal consolidation to preserve debt sustainability and ensure intergenerational equity.
- Bold structural reforms to improve institutions, governance, and the business environment are necessary for a sustainable, more inclusive, and diverse economic model.
- Chapter highlights:
- Russia’s Slowdown Is Weighing on CCA Economic Activity
- Risks Are Largely to the Downside
- Inflation Pressures Call for Effective Monetary Policy Frameworks
- External and Fiscal Positions Are Vulnerable
- Stronger Financial Systems Are Needed to Support Growth
- Time for a New Economic Model
Annexes and Statistical Appendix
- Annex I. Medium-Term Economic Prospects in the MENAP and CCA Regions:
- Potential Growth Is Slowing Faster Than in Other Regions
- Reasons behind Declines in Potential Growth Vary
- Policies to Raise Potential Growth
- Annex II. Public Infrastructure Investment in the MENAP and CCA Regions:
- Infrastructure Gaps
- Jobs and Growth Implications of Higher Public Investment
- Investment Effi ciency
- Policy Implications
- Annex III. Access to Finance for Small and Medium-Sized Enterprises in the MENAP and CCA Regions:
- SMEs, Inclusive Growth, and Access to Finance
- Factors Constraining SME Access to Finance
- Impact of Global Regulatory Initiatives
- Recent Reforms
- Islamic Finance
- Policy Recommendations
- Annex IV. Measuring Inclusiveness in the MENAP and CCA Regions:
- Mixed Performance on Poverty, Inequality, and Middle Class Size
- Low Growth and Access to Services in MENAP Oil Importers
- Lack of Employment Is a Key Inclusiveness Problem
- Acute Gender Inequality in MENAP
- Toward Better Outcomes
- Annex V. Economic Cooperation and Integration in the CCA:
- Rationale for Economic Cooperation and Integration in the CCA
- Status of Economic Cooperation and Integration in the CCA
- Several Factors Explain the Slow Pace of Regional Integration
- Prospects
- Statistical Appendix: Download the Statistical Appendix
- References: Download References
Regional Economic Outlook: Middle East and Central Asia, October 2014 -- Table of Contents
Content in this bundle
- آفاق الاقتصاد الإقليمي: منطقة الشرق الأوسط وآسيا الوسطى؛ المرافق -- أكتوبر 2014
- Regional Economic Outlook: Middle East and Central Asia
- _menaph1014fpdf
- Annex I. Medium-Term Economic Prospects
- Annex Ii. Public Infrastructure Investment in the Menap and Cca Regions
- Annex III. Access to Finance for Small and Medium-Sized Enterprises in the MENAP and CCA Regions
- _a4pdf
- Annex V. Economic Cooperation; Regional Economic Outlook: Middle East and Central Asia; October 2014
- Acknowledgments: Regional Economic Outlook: Middle East and Central Asia; October 2014
- Assumptions and Conventions: Regional Economic Outlook: Middle East and Central Asia; October 2014
- _c1c2
- C1pdf
- C2pdf
- C3
- C3pdf
- CCA Region Highlights: Regional Economic Outlook: Middle East and Central Asia; October 2014
- CCA Region Highlights: Regional Economic Outlook: Middle East and Central Asia; October 2014
- Regional Economic Outlook: Caucasus and Central Asia; Presentation; November 2014
- Country Groupings: Regional Economic Outlook: Middle East and Central Asia; October 2014
- MENAP Region Highlights: Regional Economic Outlook: Middle East and Central Asia; October 2014
- MENAP Region Highlights: Regional Economic Outlook: Middle East and Central Asia; October 2014
- Presentation on the Middle East and North Africa Regional Economic Outlook; October 2014
- Regional Economic Outlook: Middle East and Central Asia; October 2014
- _mreost1014pdf
- References; Regional Economic Outlook: Middle East and Central Asia; October 2014
- World Economic Outlook: Regional Economic Outlook: Middle East and Central Asia; October 2014
- Основные положения по региону КЦА
- Mreost1014