Regional Economic Regional Economic Outlook: Middle East & Outlook: Middle East &

Central AsiaCentral AsiaInternational Monetary Fund – October 2009

Jennifer Martin

Chapter 2: MENAP Oil ImportersChapter 2: MENAP Oil Importerso Mauritania Jordan

o Morocco Syria

o Tunisia Djibouti

o Egypt Afghanistan

o Lebanon Pakistan

Coverage of the Slow Coverage of the Slow RecoveryRecoveryHow have these countries fared after

being aggravated by the worldwide economic slump?

What has taken effect to help ease out the MENAP region’s oil importers?

Exports Rising Exports Rising Once AgainOnce AgainAs displayed in activity from MENAP’s top 3 oil importers, exports have been climbing

Evidently, levels are not as high as from 2008

This comeback is still regarded as uncertain

Financial Markets’ Financial Markets’ Nicely Bouncing Nicely Bouncing BackBackThese stock markets have nearly doubled, showing an even better recovery than exports did

Also, the remaining countries have been keeping up

In this respect, Tunisia has been doing an outstanding job

Meager Projections Meager Projections on Real GDPon Real GDP% Change in GDP for 2009 is predicted to be +3.6, for 2010 is +3.8

These values are up from what was stated in the issue released in May 2009

Growth is likely to continue in the same manner, rather gradually

Results of the downturnResults of the downturnFDI and exports of merchandise were

primarily affected

On a smaller scale, tourism and remittances fell

Although, MENAP oil-importing countries suffered a hit that was not too forceful overall

The mild slowdown…The mild slowdown…

Advanced Manufacturing

The decline could have been worse

……induces a long, induces a long, slow reboundslow reboundMinor global integration softened the negative impact

At what cost?

The oil importers do not receive sufficient value, when it comes to production

Fighting Back With Various Policy Fighting Back With Various Policy Changes - ExamplesChanges - ExamplesEgypt: +1% on expenditure, cutting of

policy rates, maintain the 100% guarantee on deposits at banks

Morocco: raise public investment, increase low-end wages, reduce income tax

Tunisia: expedite investment projects, implement fiscal changes that equal 1.4% of 2009 GDP

Effects?Effects?Drop in inflation

Competition has been affected

As expected, there is still room for development

Factors of Factors of RecoveryRecoveryDomestic consumption will act as the main boost for MENAP’s oil importers

FDI, tourism, and remittances will not be able to pull back up so much

Energy costs are ascending

Imports likely to plunge

What’s in store for the future?What’s in store for the future?Possible jumps in the price of oil

Poverty to remain; social stability will be stagnant

Sluggish recovery may harm businesses and the quality of loans, which would mean dwindling confidence in banks

Keep stimulus ongoing (stop when unnecessary), meanwhile focus on enhancing production sector