Regional Economic Outlook Update: Middle East and Central Asia
Middle East and Central Asia, May 2, 2018
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Bibliographic details
- Published: May 2, 2018
- Series: Middle East and Central Asia
Overview and main findings
- Growth is improving in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region.
- Growth was stronger than expected in 2017 in the Caucasus and Central Asia (CCA) region.
- The regions are not fully benefitting from the stronger global outlook.
- In MENAP, the recovery is described as fragile and requires further reforms to diversify economies, create jobs, and secure resilience.
- In CCA, the 2017 growth momentum is considered temporary; action is needed now to spur private‑sector development to avoid a new reality of low growth.
Regional risks and external environment
- Risks to the global outlook are broadly balanced in the near term, but are skewed to the downside over the medium term.
- Specific risks include:
- a rapid tightening of global financial conditions;
- escalating import tariffs or a shift toward inward-looking policies that could harm international trade, reduce global growth, and dampen commodity prices.
- Oil market developments:
- Oil prices grew strongly in the second half of 2017, rising above $65 a barrel in January.
- Drivers cited: improved global growth outlook, extension of the OPEC+ agreement limiting oil production through the end of 2018, unplanned outages, and geopolitical tensions.
- More recently, rapidly rising US shale production has caused oil prices to edge down.
- The document states that, while oil price assumptions for 2018 and 2019 were revised upward relative to the October 2017 REO, the medium-term outlook for oil prices remains subdued.
Projections and key quantitative assumptions
- Publication date: May 2018 (Regional Economic Outlook: Middle East, North Africa, Afghanistan, and Pakistan (May 2, 2018); Regional Economic Outlook: Caucasus and Central Asia (May 14, 2018)).
- Working assumptions adopted for projections:
- Price of oil will average US$62.3 a barrel in 2018.
- Price of oil will average US$58.2 a barrel in 2019.
- The six‑month London interbank offered rate (LIBOR) on U.S.-dollar deposits will average 2.4 percent in 2018.
- The six‑month LIBOR will average 3.4 percent in 2019.
- Projections are based on statistical information available through early April 2018.
- The 2018 and 2019 data in figures and tables are projections and are described as working hypotheses rather than forecasts.
Policy implications and recommendations
- MENAP:
- Accelerate reforms to diversify economies, create jobs, and strengthen resilience to consolidate the fragile recovery.
- CCA:
- Seize the current rebound in global activity and prospects for closer regional and global integration by pushing toward a private‑sector-led growth model.
- Preserve macroeconomic stability, including addressing fiscal and financial sector challenges.
- Make further progress on structural reforms to avoid settling into lower medium‑term growth.
Data, methodology, and country coverage notes
- The IMF’s Middle East and Central Asia Department (MCD) countries and territories listed comprise Afghanistan, Algeria, Armenia, Azerbaijan, Bahrain, Djibouti, Egypt, Georgia, Iran, Iraq, Jordan, Kazakhstan, Kuwait, the Kyrgyz Republic, Lebanon, Libya, Mauritania, Morocco, Oman, Pakistan, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tajikistan, Tunisia, Turkmenistan, the United Arab Emirates, Uzbekistan, the West Bank and Gaza, and Yemen.
- The statistical appendix contains data for 31 MCD countries. Data revisions reflect methodological changes and/or revisions provided by country authorities.
- Aggregation and weighting conventions:
- Arithmetically weighted averages are used for all data aggregates except consumer price index, for which geometric averages are used.
- Fiscal aggregates (tables 10–17) are sums of individual country data after conversion to US dollars at the average market exchange rates in the years indicated, in percent of aggregate GDP, also in US dollars.
- REO aggregates use various weights: GDP at PPPs for domestic economy composites; GDP in U.S. dollars for external economy percent‑of‑GDP composites; sums of individual country data for some external nominal composites.
- Conventions and special cases:
- In tables, ellipsis points (. . .) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.”
- 2011 data for Sudan exclude South Sudan after July 9; data for 2012 onward pertain to the current Sudan.
- All data for Syria are excluded for 2011 onward due to the uncertain political situation.
- Calendar years are used except for specified fiscal‑year countries (Afghanistan, Iran, Qatar, Egypt, Pakistan) and specific table exceptions noted in the text.
- In Tables 3, 6, 13, and 14, “oil” includes gas.
- Changes introduced to REO aggregation methodology are intended to align MCDREO methodology with the WEO; the impact is described as relatively insignificant on inflation and more significant on fiscal balances but not changing the overall assessment of the outlook.
Regional Economic Outlook Update: Middle East and Central Asia (May 2018) — IMF
Content in this bundle
- cca0518-full
- cca0518-globaldevelopments
- Cca0518 Presentation
- cca0518
- mreo0518_GlobalDebelopments
- mreo0518_oe
- menap05818_oi
- Menap0518
- Menap0518
- Dataset overview
- mreo0518 statistical appendix
- cca0518k-full
- Microsoft Word - CCA Global - KAZ - Final for COM
- Microsoft Word - CCA Chapter - KAZ - Final for COM
References
- https://www.imf.org/en/publications/weo
- Global Economy in Crosscurrents of War and Technology
- https://www.imf.org/en/publications/gfsr
- Global Financial Markets Confront the War in the Middle East and Amplification Risks
- https://www.imf.org/en/publications/fm
- Fiscal Policy under Pressure: High Debt, Rising Risks
- https://www.imf.org/en/publications/reo
- Asia and Pacific
- Europe
- Middle East and Central Asia
- Sub-Saharan Africa
- Western Hemisphere
- https://www.imf.org/en/publications/areb
- Getting to Growth in an Age of Uncertainty
- https://www.imf.org/en/publications/finance-development
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