Middle East and Central Asia
Regional Economic Outlook:Middle East and Central
Asia
October 2010
[$token_name="PublicationDisclaimer"]
October 2010
[$token_name="PublicationDisclaimer"]
|
The October 2010 Regional Economic Outlook: Middle East and Central Asia reports on the regional implications of the global economic recovery and presents key policy challenges and recommendations. With the rebound in crude oil prices and production, the oil-exporting countries of the Middle East and North Africa will see visible improvements in their fiscal and external balances in 2010–11. Going forward, further efforts at financial sector development and economic diversification top the agenda. The region’s oil-importing countries, which include Afghanistan and Pakistan, have weathered the global recession well. Pakistan, however, suffered from devastating floods in July/August, which will hold back growth this year. The overriding longer-term challenges for these countries are to raise growth and provide jobs for expanding populations. In the Caucasus and Central Asia, recovery has gained momentum in virtually all countries, aided by the lagged effect of fiscal stimulus and a favorable external environment. Exports are picking up, and remittances are rebounding, though at a slowing pace. Despite the broadly positive outlook, however, risks are largely on the downside. A priority is to resolve banking sector problems and, in some countries, to reduce external debt and current account deficits. |
View the full text (use the free Adobe Acrobat Reader).
| Preface | |
| Assumptions and Conventions | |
| Country and Regional Groupings | |
| Highlights | |
| 1. MENAP Oil Exporters: Well Placed to Focus on Medium-Term Challenges | |
| The Postcrisis Recovery Continues | |
| Less Pressure on Government Budgets | |
| Accommodative Monetary Policy May Soon Have to Shift Gears | |
| Refocusing Medium-Term Fiscal Policy | |
| Moving on Financial Sector Development | |
| 2. MENAP Oil Importers: Adjusting to New Global Growth Patterns | |
| Recovery Gathers Momentum | |
| Fiscal Consolidation Under Way | |
| Monetary Policy Can Remain Accommodative | |
| Current Growth Too Low to Address Unemployment | |
| Greater Competitiveness Key to Lifting Growth | |
| Annex 2.1. 18 Million Jobs Needed: Raising Growth and Labor Market Responsiveness | |
| 3. The Caucasus and Central Asia: Challenges Beyond the Crisis | |
| Recovery Gains Traction | |
| Banking Sectors Are Not Out of the Woods, Yet | |
| Macroeconomic Policies as Recovery Gathers Momentum | |
| Fiscal Policy Should Aim for Consolidation in 2011 | |
| Monetary Policy Can Remain Accommodative, Mostly | |
| Addressing External Vulnerabilities | |
| Annex 3.1. Strengthening Monetary Transmission in the CCA | |
| Boxes | |
| 1.1 | Dependence on Oil: Cross-Country Comparison |
| 1.2 | Update on Dubai World’s Debt Restructuring |
| 1.3 | Recent Infl ation Dynamics in GCC Countries |
| 1.4 | Financial Sector Policy Responses to the Crisis Vary With Different Initial Conditions |
| 2.1 | Unprecedented Floods in Pakistan: The Social and Economic Impact |
| 2.2 | Why Is Infl ation High in Egypt and Pakistan? |
| 2.3 | Trade Patterns and Determinants in MENAP Oil-Importing Countries |
| 3.1 | Russia Recovers |
| 3.2 | Political and Ethnic Turmoil Leaves its Mark on the Kyrgyz Economy |
| 3.3 | Wheat Price Woes? |
| 3.4 | The Impact of the Belarus–Kazakhstan–Russian Federation Customs Union |
| 2.4 | Stock Markets Still Far from Peak |
| Figures | |
| 1.1 | Oil Sector Leads the Way in Growth Recovery |
| 1.2 | Exports Outpace Imports |
| 1.3 | Current Account Balances Improve Across the Board |
| 1.4 | More Favorable Financing Conditions, for the Most Part |
| 1.5 | Recuperating Stock Markets |
| 1.6 | Some Signs of Infl ationary Pressures |
| 1.7 | Better Fiscal Balances |
| 1.8 | Fiscal Stances Vary Widely |
| 1.9 | Credit and Deposits |
| 1.10 | Break-Even Oil Prices in 2010 |
| 2.1 | Output Mostly Picking Up |
| 2.2 | Local Debt Spreads Comparatively Steady |
| 2.3 | Equity Swings |
| 2.4 | Narrowing Fiscal Defi cits |
| 2.5 | Infl ation Holding Steady |
| 2.6 | Currencies Mostly Appreciating |
| 2.7 | Lagging Output and Export Growth |
| 2.8 | Growth Differentials Explained |
| 2.9 | Competitiveness and Doing Business Indicators |
| 3.1 | Exports and Remittances Pick Up |
| 3.2 | Growth Gains Ground, but Remains below Precrisis Levels |
| 3.3 | Disposable Income Has Not Yet Recovered in Many Countries |
| 3.4 | Private-Sector Credit Growth Remains Largely Subdued |
| 3.5 | High, and Mostly Rising Levels of Nonperforming Loans |
| 3.6 | Grants to Return to Precrisis Levels in Oil and Gas Importers |
| 3.7 | Public Debt Has Risen in Oil and Gas Importers |
| 3.8 | Trimming Down Defi cits in Oil and Gas Importers |
| 3.9 | Oil and Gas Exporters: Time for Fiscal Consolidation |
| 3.10 | High Current Account Defi cits in Oil and Gas Importers |
| 3.11 | Foreign Direct Investment Still in Short Supply in Oil and Gas Importers |
| 3.12 | Oil and Gas Importers’ External Debt Is High and Rising |
| 3.13 | High Levels of Dollarization |
| Table | |
| 2.1 | Fiscal Consolidation Measures Planned for 2011 |
| Statistical Appendix Tables | |
| 1 | Real GDP Growth |
| 2 | Nominal GDP |
| 3 | Oil and Non-Oil Real GDP Growth |
| 4 | Crude Oil Production and Exports |
| 5 | Consumer Price Inflation |
| 6 | Broad Money Growth |
| 7 | Central Government Fiscal Balance |
| 8 | Central Government Total Revenue, Excluding Grants |
| 9 | Oil Exporters: Central Government Non-Oil Fiscal Balance |
| 10 | Oil Exporters: Central Government Non-Oil Revenue |
| 11 | General Government Total Expenditure and Net Lending |
| 12 | Total Government Debt |
| 13 | Exports of Goods and Services |
| 14 | Imports of Goods and Services |
| 15 | Current Account Balance (Billions of U.S. dollars) |
| 16 | Current Account Balance (Percent of GDP) |
| 17 | Gross Official Reserves |
| 18 | Total Gross External Debt |
| 19 | Capital Adequacy Ratios |
| 20 | Return on Assets |
| 21 | Nonperforming Loans |
