Regional Economic Outlook

These reports discuss recent economic developments and prospects for countries in various 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 a particular region.

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Sub-Saharan Africa

Regional Economic Outlook for Sub-Saharan Africa, April 2022

April 28, 2022

Description: The economic recovery in sub-Saharan Africa surprised on the upside in the second half of 2021, prompting a significant upward revision in last year’s estimated growth, from 3.7 to 4.5 percent. This year, however, that progress has been jeopardized by the Russian invasion of Ukraine which has triggered a global economic shock that is hitting the region at a time when countries’ policy space to respond to it is minimal to nonexistent. Most notably, surging oil and food prices are straining the external and fiscal balances of commodity-importing countries and have increased food security concerns in the region.

Middle East and Central Asia

Regional Economic Outlook April 2022 Middle East Central Asia

April 27, 2022

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.

Western Hemisphere Region

Regional Economic Outlook for the Western Hemisphere, April 2022

April 26, 2022

Description: The war in Ukraine is shaking the world economy and raising uncertainty about the outlook for Latin America and the Caribbean. Even before the war, the region’s recovery from the pandemic was losing momentum and growth is returning to its pre-pandemic trend rate of around 2.5 percent for 2022. The war brings a further shock to inflation, and policymakers across the region have reacted decisively by tightening monetary policy and implementing measures to soften the blow of higher food and energy prices on the most vulnerable—thus mitigating the risks of social unrest. Rising interest rates complicate the management of already high debt levels, and an escalation of the war could further tighten financial conditions in the region. In this context, an inclusive fiscal consolidation strategy would maintain support for the vulnerable while helping rebuild buffers.

Asia and Pacific Region

Regional Economic Outlook for Asia and Pacific, April 2022

April 21, 2022

Description: Regional Economic Outlook for Asia and Pacific, April 2022

Europe

Regional Economic Outlook for Europe, April 2022

April 20, 2022

Description: The Russian invasion of Ukraine created a humanitarian catastrophe. In two months since the outbreak of the war, about 5 million people, mostly women and children, fled Ukraine, and a further 7 million are estimated to be displaced internally. In addition, thousands have been wounded or killed.

Western Hemisphere Region

Regional Economic Outlook for Western Hemisphere, October 2021

October 21, 2021

Description: An economic recovery is underway in Latin America and the Caribbean (LAC) but the pandemic still casts shadows on much of the region. The recovery was robust in the first quarter of 2021 but lost momentum in some countries in the second quarter, reflecting the rebound in COVID-19 cases. Real GDP is projected to grow by 6.3 percent in 2021, followed by a more moderate growth of 3 percent in 2022, but would not catch up with pre-pandemic trends in the medium term as persistent weakness in labor markets raises risks of scarring. Broadly favorable external conditions, high commodity prices, and pent-up demand support short-term growth, while monetary and fiscal policy reversals work in the other direction. Risks to the outlook are tilted downward. Main downside risks are the emergence of more transmissible and deadlier COVID-19 variants, tightening of global financial conditions, sovereign debt rollover risks, and social unrest as a year with heavy election schedule looms. Fiscal policy should allocate sufficient resources for health spending, including vaccination, and continue to support households and firms in a more targeted fashion while the pandemic persists, backed by credible assurances of medium-term debt sustainability to maintain access to finance. Monetary policy has started to address inflationary pressures but should continue to support economic activity insofar as the dynamics of inflation expectations permit. Financial policy should shift from blanket support to targeted support of viable firms, to ensure that necessary labor and capital reallocations are not hindered. Supply-side policies should foster inclusive growth, including through progressive and growth-friendly tax reforms and measures to intensify climate change adaptation and mitigation.

Sub-Saharan Africa

Regional Economic Outlook for Sub-Saharan Africa, October 2021

October 21, 2021

Description: The world remains in the grip of the COVID-19 pandemic and a seemingly accelerating pace of climate change, both of which underscore the need for increased global cooperation and dialogue. Solutions to these global problems must involve all countries and all regions, especially sub-Saharan Africa, with the world’s least vaccinated population, most promising renewable energy potential, and critical ecosystems. Sub-Saharan Africa’s economy is set to expand by 3.7 percent in 2021 and 3.8 percent in 2022. This follows the sharp contraction in 2020 and is much welcome, but still represents the slowest recovery relative to other regions.

Europe

Regional Economic Outlook for Europe, October 2021

October 20, 2021

Description:

Regional Economic Outlook for Europe, October 2021

 

Asia and Pacific Region

Regional Economic Outlook for Asia and Pacific, October 2021

October 19, 2021

Description:

The Asian outlook for 2021 has been downgraded by more than 1 percent to 6.5 percent compared with the April 2021 World Economic Outlook because of new peaks of the pandemic cycle driven by the highly contagious Delta variant. As vaccination rates accelerate, the region is expected to grow slightly faster in 2022 than anticipated earlier. Although Asia and Pacific remains the fastest growing region in the world, the divergence between Asian advanced economies and emerging market and developing economies is deepening, reflecting vaccination coverage and policy support, and medium-term output levels in emerging market and developing economies are expected to remain below pre-pandemic trends. Risks are tilted to the downside, mainly because of uncertain pandemic dynamics, vaccine efficacy against virus variants, supply chain disruptions, and potential global financial spillovers from US monetary normalization in the presence of domestic financial vulnerabilities.

Middle East and Central Asia

Regional Economic Outlook for the Middle East and Central Asia

October 19, 2021

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.

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