{
  "title": "Regional Economic Outlook: Trade-Offs Today for Transformation Tomorrow",
  "publication": "Middle East and Central Asia, April 11, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia",
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  "summary": "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.",
  "sections": [
    {
      "heading": "Regional developments and near-term outlook",
      "content": "- 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, and the path to recovery in 2021 is expected to be long and divergent.\n- The outlook will vary significantly across countries, depending on:\n  - the pandemic’s path,\n  - vaccine rollouts,\n  - underlying fragilities,\n  - exposure to tourism and contact-intensive sectors,\n  - policy space and actions.\n- 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.\n- Policymakers must also address transformational challenges to build forward better and accelerate the creation of more inclusive, resilient, sustainable, and green economies.\n- Regional and international cooperation will be key complements to strong domestic policies."
    },
    {
      "heading": "Government debt, financing, and legacy risks from the pandemic",
      "content": "- The coronavirus (COVID-19) crisis led to a surge in government debt and financing needs as many countries in the Middle East and Central Asia reacted swiftly to mitigate the pandemic’s impact.\n- Several countries successfully accessed international financial markets; domestic banks covered a significant share of emerging markets' financing needs, further expanding their already significant exposure to the public sector.\n- By contrast, most low-income countries (LICs) had a small response to the crisis because of financing and policy space constraints.\n- Public gross financing needs in most emerging markets in the Middle East and Central Asia are expected to remain elevated in 2021–22, with downside risks in the event of:\n  - tighter global financial conditions, and/or\n  - delayed fiscal consolidation due to weaker-than-expected recovery.\n- Further reliance on domestic financing will reduce banks’ ability to support the private sector’s emergence from the crisis, thus prolonging the recovery."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Adopt credible medium-term fiscal and debt management strategies.\n- Implement policy actions to develop domestic capital markets and mitigate banks’ overexposure to the sovereign.\n- Balance policies that:\n  - continue saving lives and livelihoods,\n  - promote recovery,\n  - ensure debt sustainability,\n  - entrench financial stability.\n- Maintain focus on transformational reforms to create more inclusive, resilient, sustainable, and green economies.\n- Strengthen regional and international cooperation as a complement to strong domestic policies."
    },
    {
      "heading": "Data, projections, and technical assumptions",
      "content": "- The following statistical appendix tables contain data for 32 MCD countries and territories. Data revisions reflect changes in methodology and/or revisions provided by country authorities.\n- A number of assumptions have been adopted for the projections presented in the April 2021 Regional Economic Outlook Update: Middle East and Central Asia:\n  - It has been assumed that established policies of national authorities will be maintained.\n  - The price of oil will average US$52.64 a barrel in 2021 and US$50.07 a barrel in 2022.\n  - The six-month London interbank offered rate (LIBOR) on U.S.-dollar deposits will average 0.3 percent in 2021 and 0.4 percent in 2022.\n- These assumptions are working hypotheses rather than forecasts; the uncertainties surrounding them add to the margin of error in the projections.\n- The 2021 and 2022 data in the tables are projections based on statistical information available through late March 2021.\n\nRegional Economic Outlook: Trade-Offs Today for Transformation Tomorrow — April 2021 (IMF web landing page content).\n\n---\n\n Content in this bundle\n\n- Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021\n  - Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021 (PDF){rel=\"external\" type=\"application/pdf\"}\n- MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22\n  - MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia\n  - Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia (PDF){rel=\"external\" type=\"application/pdf\"}\n- statsapp\n  - statsapp (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - statsapp (PDF){rel=\"external\" type=\"application/pdf\"}\n- Dataset overview\n  - Dataset overview (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Dataset overview (XLSX){rel=\"external\" type=\"application/vnd.openxmlformats-officedocument.spreadsheetml.sheet\"}\n- Full Report\n  - Full Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Full Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- IMF Data Portal\n- IMF Data Mapper® v3\nPlot, compare and import data\n- Four Questions About Debt and Financing Risks from COVID-19 in the Middle East and North Africa\n- Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.\n- Modify your profile\n\nSource: https://www.imf.org/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia"
    }
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    "Published: April 11, 2021",
    "Series: Middle East and Central Asia",
    "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, and the path to recovery in 2021 is expected to be long and divergent.",
    "The outlook will vary significantly across countries, depending on:",
    "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.",
    "Policymakers must also address 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.",
    "The coronavirus (COVID-19) crisis led to a surge in government debt and financing needs as many countries in the Middle East and Central Asia reacted swiftly to mitigate the pandemic’s impact.",
    "Several countries successfully accessed international financial markets; domestic banks covered a significant share of emerging markets' financing needs, further expanding their already significant exposure to the public sector.",
    "By contrast, most low-income countries (LICs) had a small response to the crisis because of financing and policy space constraints.",
    "Public gross financing needs in most emerging markets in the Middle East and Central Asia are expected to remain elevated in 2021–22, with downside risks in the event of:",
    "Further reliance on domestic financing will reduce banks’ ability to support the private sector’s emergence from the crisis, thus prolonging the recovery.",
    "Adopt credible medium-term fiscal and debt management strategies.",
    "Implement policy actions to develop domestic capital markets and mitigate banks’ overexposure to the sovereign.",
    "Balance policies that:",
    "Maintain focus on transformational reforms to create more inclusive, resilient, sustainable, and green economies.",
    "Strengthen regional and international cooperation as a complement to strong domestic policies.",
    "The following statistical appendix tables contain data for 32 MCD countries and territories. Data revisions reflect changes in methodology and/or revisions provided by country authorities.",
    "A number of assumptions have been adopted for the projections presented in the April 2021 Regional Economic Outlook Update: Middle East and Central Asia:",
    "These assumptions are working hypotheses rather than forecasts; the uncertainties surrounding them add to the margin of error in the projections.",
    "The 2021 and 2022 data in the tables are projections based on statistical information available through late March 2021.",
    "**Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021**",
    "**MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22**",
    "**Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia**",
    "**statsapp**",
    "**Dataset overview**",
    "**Full Report**",
    "[IMF Data Portal](https://data.imf.org/en/datasets/IMF.MCD:MCDREO)",
    "[IMF Data Mapper® v3",
    "[Four Questions About Debt and Financing Risks from COVID-19 in the Middle East and North Africa](https://www.imf.org/en/news/articles/2021/04/27/na042821-4-questions-about-debt-and-financing-risks-from-covid-19-in-mena)",
    "[Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website.](https://www.imf.org/en/email-subscription/index)",
    "[Modify your profile](https://www.imf.org/en/email-subscription/login)"
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