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Regional Economic Outlook Fall 2010 Afghanistan Pakistan Iran Iraq Saudi Arabia Yemen Oman United Arab Emirates Qatar Bahrain Kuwait Sudan Libya Algeria Morocco Mauritania Lebanon Syria Jordan Egypt Tunisia Djibouti

Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

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Page 1: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Regional Economic OutlookFall 2010

AfghanistanAfghanistan

PakistanPakistan

IranIran

IraqIraq

Saudi ArabiaSaudi Arabia

YemenYemen

OmanOman

United Arab EmiratesUnited Arab Emirates

QatarQatar

BahrainBahrain

KuwaitKuwait

SudanSudan

LibyaLibyaAlgeria

Algeria

MoroccoMorocco

MauritaniaMauritania

LebanonLebanon Syria

Syria

JordanJordan

EgyptEgypt

TunisiaTunisia

DjiboutiDjibouti

Page 2: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Global outlook: Two-speed recovery in motion

Real GDP Growth(percent change from a year earlier)

2000 02 04

World

Emerging economies

Advanced economies

1006 08

Temporary slow-down2010:H2 — 2011:H1

Page 3: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

3

A closer look at the two-speed recovery

Real GDP Growth(percent change from a year earlier)

Page 4: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Rebalancing is needed along two dimensions

Demand from external surplus economies

4

Demand from external deficit economies

Private demand

Publicdemand

Page 5: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

5

Prospects for World GDP Growth(percent change)

Downside risks remain, but global double-dip unlikely

Page 6: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

6

Inflationary pressures are forecast to remain subdued

Core Inflation(Twelve-month change in the core CPI)

062002 04 Jul.10

08

For countries with a peg to the USD or euro, this means that higher inflation rates may lead to real appreciation.

Page 7: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

7

Oil Demand Growth(contributions to y-o-y growth in percent)

Total demand

Page 8: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

8

Major Food Crops, Nearest Futures Prices (index, Jul. 1, 2010 = 100)

Wheat

Corn

Temporary Wheat Supply Shock, Limited Spillovers

Page 9: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Net Monthly Flows to Emerging Market Equity Funds

(billions of U.S. dollars)

Sep. 10

Net Monthly Flows to Emerging Market Bond Funds

(billions of U.S. dollars)

9

Capital Flows, Reserves, Appreciation

Sep. 10

Page 10: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

MENAP Oil Exporters

IranIran

IraqIraq

Saudi ArabiaSaudi Arabia

YemenYemen

OmanOman

United Arab EmiratesUnited Arab Emirates

QatarQatar

BahrainBahrain

KuwaitKuwait

SudanSudan

LibyaLibyaAlgeria

Algeria

Page 11: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Overview — Oil Exporters

Page 12: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Global demand recovers, boosts activity

Sources: National authorities; and IMF staff estimates.

MENAP Oil Exporters

Page 13: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

…and external balances rebound

Sources: National authorities; and IMF staff estimates.

MENAP Oil Exporters

$257

$75$101 $124$107

$5$23 $31

-$6

-$10

-$7-$7

Page 14: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

…as do fiscal balances

Sources: National authorities; and IMF staff estimates.

MENAP Oil Exporters

Page 15: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Many countries approaching break-even prices

Sources: National authorities; and IMF staff estimates.

Average oil price in 2010

MENAP Oil Exporters

Page 16: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Some countries continue to provide stimulus

Sources: National authorities; and IMF staff estimates.

MENAP Oil Exporters

Percent change in total government expenditures in U.S. dollars(From 2008 to 2011)

Page 17: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Keep an eye on inflation

Source: National authorities.1Algeria, Bahrain, Iraq, Kuwait, Libya, and Oman

MENAP Oil Exporters

Page 18: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Financial sectors after the crisis (December 2009)

Source: National authorities.1December 2008

MENAP Oil Exporters

Page 19: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

MENAP Oil Exporters

Page 20: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

MENAP Oil Importers

AfghanistanAfghanistan

PakistanPakistan

MoroccoMorocco

MauritaniaMauritania

LebanonLebanon Syria

Syria

JordanJordan

EgyptEgypt

TunisiaTunisia

DjiboutiDjibouti

Page 21: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Overview — Oil Importers

Page 22: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Trade recovery is moving ahead

Annual percent change of U.S. dollar value, 3-month moving average

Sources: National authorities; IMF Direction of Trade Statistics; and Haver Analytics.¹ Egypt, Jordan, Lebanon, Morocco, Pakistan, and Tunisia.

Region’s exports are again growing steadily

-40

-20

0

20

40

60

Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10

European Union: imports

MENAP oil importers:¹ exports

Emerging and devel. economies: exports

MENAP Oil Importers

Page 23: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Real GDP picking up across region

Source: National Authorities; and IMF staff estimates.

Annual percentage change

MENAP Oil Importers

2011

Page 24: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Progress in fiscal consolidation

Source: National Authorities; and IMF staff estimates and projections.

MENAP Oil Importers

Page 25: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Most can maintain current monetary stance

Sources: Haver Analytics; and national authorities.

Consumer Prices; annual percentage change

MENAP Oil Importers

Aug-10

Page 26: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Dominique Strauss-Kahn:

“We must not underestimate the daunting prospects we face: a lost generation, disconnected from the labor market, with a progressive loss of skills and motivation.”

More than 18 million jobs needed

MENAP Oil Importers

AFP/ABDELHAK SENNA/Getty Images. Reprinted with permission. (Unemployed workers wait for a job in the Bani Makada quarter of Tangiers, Morocco on March 20, 2004.)

Page 27: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

High unemployment a long-standing issue

Sources: National authorities; IMF, World Economic Outlook; staff estimates; and International Labor Organization.Note: MENA6 refers to Egypt, Jordan, Lebanon, Morocco, Syria, and Tunisia. Youth unemployment estimate for MENA6 excludes Jordan. Data refers to 2008 or latest available year.

MENAP Oil Importers

MENA6

Central and South-Eastern Europe (non-EU) and CIS

Sub-Saharan Africa

Latin America

Developed EconomiesWorld

South-East Asia and the

Pacific

South Asia

East Asia

5

7

9

11

13

15

17

19

21

23

4 6 8 10

Yo

uth

un

emp

loym

ent

(Per

cen

t)

Total unemployment rate (Percent)

Page 28: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Growth and export gaps: getting bigger

Source: IMF, World Economic Outlook.

Goods exports(in percent of GDP)

MENAP Oil Importers

EM total

EGY

JOR

LBN

MRT

MARPAK

SYR

TUN

Emerging Asia

China

India

-2

0

2

4

6

8

10

-5 0 5 10 15

Volume of exports of goods and services per capita(average annual growth rate, 1990–2009)

Rea

l GD

P p

er c

apit

a(a

vera

ge a

nnua

l gro

wth

rat

e, 1

990–

2009

)

Page 29: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Competitiveness will need to improve

Source: World Economic Forum, Global Competitiveness Report, 2010–11.

MENAP Oil Importers

Competitiveness Rankings, 2010–11¹

¹Economies are ranked from 1 to 139, with first place being the best. MENAP oil importers is a simple average of Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Syria, and Tunisia. Emerging Asia is simple average of China, Hong Kong SAR, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan Province of China, Thailand, and Vietnam.

0

25

50

75

100Market size

Inf rastructure

Macroeconomic stability

Health and primary

education

Higher education and

training

Goods market ef f iciency

Labor market ef f iciency

Financial market

sophistication

Innovation

Business sophistication

Technological readiness

Institutions

MENAP oil importers Emerging Asia

Best

Page 30: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

Real GDP trends, annual percent change

901980 85 2000 10

Advancedeconomies

1595 05

Source: IMF, World Economic Outlook database.

Note: 1980-2015 real GDP growth data are de-trended as 10-year backward rolling averages.

Asia

Latin America

Broader Partnerships

MENAP Oil Importers

Page 31: Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier) 20000204 World Emerging economies Advanced economies

MENAP Oil Importers