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

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

3

A closer look at the two-speed recovery

Real GDP Growth(percent change from a year earlier)

Rebalancing is needed along two dimensions

Demand from external surplus economies

4

Demand from external deficit economies

Private demand

Publicdemand

5

Prospects for World GDP Growth(percent change)

Downside risks remain, but global double-dip unlikely

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.

7

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

Total demand

8

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

Wheat

Corn

Temporary Wheat Supply Shock, Limited Spillovers

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

MENAP Oil Exporters

IranIran

IraqIraq

Saudi ArabiaSaudi Arabia

YemenYemen

OmanOman

United Arab EmiratesUnited Arab Emirates

QatarQatar

BahrainBahrain

KuwaitKuwait

SudanSudan

LibyaLibyaAlgeria

Algeria

Overview — Oil Exporters

Global demand recovers, boosts activity

Sources: National authorities; and IMF staff estimates.

MENAP Oil Exporters

…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

…as do fiscal balances

Sources: National authorities; and IMF staff estimates.

MENAP Oil Exporters

Many countries approaching break-even prices

Sources: National authorities; and IMF staff estimates.

Average oil price in 2010

MENAP Oil Exporters

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)

Keep an eye on inflation

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

MENAP Oil Exporters

Financial sectors after the crisis (December 2009)

Source: National authorities.1December 2008

MENAP Oil Exporters

MENAP Oil Exporters

MENAP Oil Importers

AfghanistanAfghanistan

PakistanPakistan

MoroccoMorocco

MauritaniaMauritania

LebanonLebanon Syria

Syria

JordanJordan

EgyptEgypt

TunisiaTunisia

DjiboutiDjibouti

Overview — Oil Importers

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

Real GDP picking up across region

Source: National Authorities; and IMF staff estimates.

Annual percentage change

MENAP Oil Importers

2011

Progress in fiscal consolidation

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

MENAP Oil Importers

Most can maintain current monetary stance

Sources: Haver Analytics; and national authorities.

Consumer Prices; annual percentage change

MENAP Oil Importers

Aug-10

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.)

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)

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

)

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

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

MENAP Oil Importers