## Regional Economic Outlook: Trade-Offs Today for Transformation Tomorrow _Middle East and Central Asia, April 11, 2021_ ## Source details **Canonical URL:** [Regional Economic Outlook: Trade-Offs Today for Transformation Tomorrow](https://www.imf.org/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia) ## Other formats - [Markdown version](/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia/index.md) - [Structured JSON version](/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia/index.json) - [Bundle manifest](/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia/bundle-manifest.json) ## Bibliographic details - Published: April 11, 2021 - Series: Middle East and Central Asia --- ### Regional developments and near-term outlook - 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: - the pandemic’s path, - vaccine rollouts, - underlying fragilities, - exposure to tourism and contact-intensive sectors, - policy space and actions. - 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. ### Government debt, financing, and legacy risks from the pandemic - 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: - tighter global financial conditions, and/or - delayed fiscal consolidation due to weaker-than-expected recovery. - Further reliance on domestic financing will reduce banks’ ability to support the private sector’s emergence from the crisis, thus prolonging the recovery. ### Policy recommendations and priorities - 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: - continue saving lives and livelihoods, - promote recovery, - ensure debt sustainability, - entrench financial stability. - 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. ### Data, projections, and technical assumptions - 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: - It has been assumed that established policies of national authorities will be maintained. - The price of oil will average US$52.64 a barrel in 2021 and US$50.07 a barrel in 2022. - 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. - 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. *Regional Economic Outlook: Trade-Offs Today for Transformation Tomorrow — April 2021 (IMF web landing page content).* --- ## Content in this bundle - **Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021** - [Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021 (Markdown version)](/-/media/files/publications/reo/mcd-cca/2021/april/english/keymessages.pdf.md){rel="alternate" type="text/markdown"} - [Key Messages: Regional Economic Outlook for the Middle East and Central Asia; April 2021 (PDF)](/-/media/files/publications/reo/mcd-cca/2021/april/english/keymessages.pdf){rel="external" type="application/pdf"} - **MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22** - [MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22 (Markdown version)](/-/media/files/publications/reo/mcd-cca/2021/april/english/mena-table.pdf.md){rel="alternate" type="text/markdown"} - [MENA, Afghanistan, and Pakistan: Selected Economic Indicators, 2000–22 (PDF)](/-/media/files/publications/reo/mcd-cca/2021/april/english/mena-table.pdf){rel="external" type="application/pdf"} - **Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia** - [Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia (Markdown version)](/-/media/files/publications/reo/mcd-cca/2021/april/english/pressremarks.pdf.md){rel="alternate" type="text/markdown"} - [Press Briefing Remarks: April 2021 Regional Economic Outlook for the Middle East and Central Asia (PDF)](/-/media/files/publications/reo/mcd-cca/2021/april/english/pressremarks.pdf){rel="external" type="application/pdf"} - **statsapp** - [statsapp (Markdown version)](/-/media/files/publications/reo/mcd-cca/2021/april/english/statsapp.pdf.md){rel="alternate" type="text/markdown"} - [statsapp (PDF)](/-/media/files/publications/reo/mcd-cca/2021/april/english/statsapp.pdf){rel="external" type="application/pdf"} - **Dataset overview** - [Dataset overview (Markdown version)](/-/media/files/publications/reo/mcd-cca/2021/april/english/statsappdata.xlsx.md){rel="alternate" type="text/markdown"} - [Dataset overview (XLSX)](/-/media/files/publications/reo/mcd-cca/2021/april/english/statsappdata.xlsx){rel="external" type="application/vnd.openxmlformats-officedocument.spreadsheetml.sheet"} - **Full Report** - [Full Report (Markdown version)](/-/media/files/publications/reo/mcd-cca/2021/april/english/text.pdf.md){rel="alternate" type="text/markdown"} - [Full Report (PDF)](/-/media/files/publications/reo/mcd-cca/2021/april/english/text.pdf){rel="external" type="application/pdf"} --- ## References - [IMF Data Portal](https://data.imf.org/en/datasets/IMF.MCD:MCDREO) - [IMF Data Mapper® v3 Plot, compare and import data](https://www.imf.org/external/datamapper/datasets/MCDREO) - [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) _Source: https://www.imf.org/en/publications/reo/meca/issues/2021/04/11/regional-economic-outlook-middle-east-central-asia_