Download Press Release IMF publishes regional economic outlook for MENA

Press Release
IMF publishes regional economic outlook for MENA, Afghanistan
and Pakistan
MENA set to grow despite uncertainties
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Average GDP growth of regional oil exporters, ex-Libya, expected to reach 4.9% in 2011.
Increase on previous estimate of 4.6%
GCC GDP growth expected to reach 7.8% in 2011. Increase on previous estimate of 5.2%
Political unrest and surge in oil prices are the key developments for the region
Dubai – 27 April 2011: DIFC, the financial and business gateway between the regional emerging
markets and the world, in partnership with the Dubai School of Government today hosted the launch
of the International Monetary Fund (IMF) Outlook for MENA, Afghanistan, and Pakistan: Managing
New Challenges in an Uncertain Environment. Two developments mark the IMF’s outlook for the
region: unrest in parts of the Arab world and the surge in global fuel and food prices. As a result, the
near-term economic outlook is subject to unusually large uncertainties stemming from the fluid
political and security situation in a number of countries.
According to the report, higher oil prices and production volumes will lead to higher growth in 2011
for most of the region’s oil exporters1. Average real GDP growth for oil exporters, excluding Libya, is
projected to reach 4.9 percent in 2011 compared with 3.5 percent in 2010 and its previous estimate
of 4.5 percent.
Meanwhile, the IMF has raised its projection for GCC growth in 2011 from 5.2 percent to 7.8 percent,
as oil production expands to stabilise global oil supply in the face of supply disruptions elsewhere.
This follows 5.0 percent growth in 2010. GCC non-oil growth is set to accelerate by more than 1
percentage point to 5.3 percent in 2011.
“The changes in motion in the Middle East and North Africa are historic. Over time, they could give a
boost to the economies in the region by setting a more inclusive growth agenda, improving
governance, and providing greater and more equal opportunity for its young and growing population,”
Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, said at the launch
conference of the report in Dubai. “However, the near-term outlook is challenging, and the immediate
priority for oil-importing countries in particular is to maintain social cohesion and macroeconomic
stability in the face of multiple pressures,” he added.
Dr Nasser Saidi, Chief Economist and Head of External Relations at DIFC commented: “We are in
the midst of a period of momentous change, of risk and uncertainty but also of promise and
opportunity. Recent events have uncovered demographic, political, governance and economic
vulnerabilities in a number of MENA countries. The recent surge in inflation has exacerbated these
vulnerabilities. Economic policy should address these vulnerabilities through structural reforms
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Oil exporters: Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates and Yemen
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Press Release
aiming at raising growth rates through more inclusive growth with greater “pull up” effects, with job
creation and higher productivity growth based on a growing role for the private sector, including
through participation in infrastructure and development projects. We have the natural and financial
resources to implement reforms and improve govenance. Higher energy prices will allow the GCC
countries to play a key role in greater regional integration and as an engine of growth for the non-oil
MENA countries. We will need to ensure that the strides made by the region’s governments in recent
years towards economic liberalisation, diversification and integration are not rolled back for shortterm popular gains.”
The IMF’s outlook for oil importers2 is mixed. For Egypt and Tunisia, this year’s growth is projected to
be 2½–4 percentage points lower than in 2010, reflecting disruptions to economic activity during the
protests, a decline in tourism, and lower investment. Political uncertainty is also weighing on
Lebanon’s economy, and growth in Pakistan is still held back by the effects of last year’s floods. In
most other countries, however, growth has continued to pick up, with Jordan, Mauritania, and
Morocco benefiting from high prices for phosphate and iron ore.
Beyond the immediate challenges, the report sees the recent uprisings as a great opportunity to lay
the foundations for a socially inclusive growth agenda for the Middle East. The IMF urges each
country to find its own home-grown path for change that is broadly owned. However, the organisation
stresses that all will need to respond to some common goals to realise the region’s longer-term
potential: a stable macroeconomic environment to provide confidence and attract investment; enough
private-sector jobs to absorb the currently unemployed and a fast-growing labour force; access to
economic opportunity for citizens to realise their potential; social protection for the vulnerable; and
strong and transparent institutions that ensure accountability and good governance. “The aim is not
just sustained high growth, but also growth that is more inclusive and results in broadly shared
development gains.” Masood Ahmed said.
- Ends For further inquiries on DIFC, please contact:
Dubai International Financial Centre
Shaima Al Zarouni
PR Manager
Tel: +971 4 362 2432
[email protected]
Brunswick Group
Edward Moore / Nabih Tarabay
Tel: +971 4 446 6270
[email protected]
About the DIFC
The Dubai International Financial Centre (DIFC) is the financial and business gateway between the regional
emerging markets and the world.
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Oil importers: Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Syria and Tunisia
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Press Release
Since its launch in 2004, the DIFC has established a current client base of 792 firms which have registered at
the Centre, including 16 of the world’s largest 20 banking institutions. Thousands of employees operate in an
open environment complemented by international regulations, laws and standards. The DIFC offers its member
institutions incentives such as 100 per cent foreign ownership, zero percent tax rate on income and profits and
no restriction on capital convertibility or profit repatriation. In addition, the DIFC’s clients benefit from modern
infrastructure, operational support services and business continuity facilities.
About the IMF Regional Economic Outlook
The Middle East and Central Asia Regional Economic Outlook (REO) is prepared biannually by the IMF’s
Middle East and Central Asia Department (MCD). The analysis and projections contained in the MCD REO are
integral elements of the Department’s surveillance of economic developments and policies in 30 member
countries. It draws primarily on information gathered by IMF staff through their consultations with member
countries.
The analysis in this report was coordinated under the general supervision of Masood Ahmed (Director of MCD).
The project was directed by Ratna Sahay (Deputy Director in MCD) and Ralph Chami (Division Chief in MCD).
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