MENA Economic Update
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This report is produced two times per year, reporting on the recent economic developments and short term outlook of the Middle East and North Africa region. It is produced by the Chief Economist's office of the region (MNACE). These reports highlight a particular theme (such as fuel subsidies, service delivery, oil prices). This series was formerly known as MENA Economic Monitor, and before that, Middle East and North Africa Regional Economic Update, and combines with the series Middle East and North Africa Quarterly Economic Brief.
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Publication
Sustaining the Recovery in Times of Uncertainty: A Regional Economic Outlook
(World Bank, Washington, DC, 2010-10)This edition of the Middle East and North Africa (MENA) regional economic update shows that recovery in the region is below historical trends. Its economic prospects depend on global developments and continued strengths in emerging-market demand and oil price trends. Growth in the region is expected to average 4% in 2010, an increase of slightly less than 2 percentage points (pp) over growth in 2009 and weak compared to increases of 5.6pp in advanced economies and 4.5pp in developing nations. Only by 2011 and 2012 is MENA s growth expected to return to the average rates achieved prior to the economic and financial crisis. Recovery has been driven by the global economic rebound and, to varying degrees, by domestic stimulus. Industrial production, which in MENA is dominated by oil, has nearly reached its pre-crisis peak, largely due to the strong recovery in emerging markets, especially Asia. However, the upturn has weakened in recent months because the global slowdown has arrived sooner and is occurring faster than previously anticipated, and there are serious concerns about the sustainability of the global recovery. In response, MENA governments have continued to stimulate their economies in 2010, and even those that did not use any type of fiscal stimulus in 2009 have started implementing fiscal measures in 2010. The economic recovery in MENA has been much less vigorous than the recovery in countries that suffered sharp output contractions. The sustainability of the recovery in Gulf Cooperation Council (GCC) economies depends on developments in the rest of the world, and on the extent to which they affect oil markets. The outlook for the global economy and oil markets in the second half of 2010 remains uncertain, and a decline in oil prices cannot be ruled out. -
Publication
Middle East and North Africa Economic Update, April 2010: Recovering from the Crisis
(World Bank, Washington, DC, 2010-04-01)This edition of the Middle East and North Africa (MENA) regional economic update concerns the region recovering from the financial crisis along with the global economy. Growth in 2010 is expected to be 4.4 percent region-wide, driven by domestic absorption as well as a positive contribution from external demand. The recovery from the crisis differs by country depending on initial conditions and the intensity of the impact via the three principal channels through which the global financial crisis affected MENA economies-the financial sector, the price of oil, and the balance of payments, reflecting the impact on trade, remittances and Foreign Direct Investment (FDI) flows. The Gulf Cooperation Council (GCC) countries are leading the regional recovery as oil prices have rebounded and the GCC financial sector is stabilizing. Developing oil exporters felt the impact of the crisis, and now the recovery, largely through the oil price channel, due to the limited integration of their banking sectors into global financial markets and the importance of oil in their exports. The oil importers were affected by the crisis through the secondary effects on trade, remittances, and FDI flows, so their recovery will depend crucially on the recovery in key markets, especially the EU and the GCC countries. High unemployment has been a problem in MENA for years, and the crisis has dimmed prospects for improvements in the near term. Ample oil and gas resources, a youthful and growing workforce, and a growing momentum to look for ways to diversify their economies imply that the growth potential of the region is high, but MENA countries continue to face formidable longer term challenges. Ensuring access to finance without compromising financial stability will be a major challenge in MENA, although issues related to weak regulatory systems, corporate governance and overdependence on the banking system also loom large. Key problems of the business environment in MENA include policy and regulatory uncertainty and discretion in implementing reforms which prevent a level playing field for all firms and encourage the pursuit of privileged access. These problems, coupled with barriers to entry and exit, have created an environment of stagnation. Addressing these issues will require applying rules and regulations consistently and without discrimination among firms and introducing reforms that promote business dynamism, private investment, and innovation.