Regional economic outlook ch. 2


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Regional economic outlook ch. 2

  1. 1. Regional Economic Outlook: Middle East & Central Asia International Monetary Fund – October 2009 Jennifer Martin
  2. 2. Chapter 2: MENAP Oil Importers <ul><li>Mauritania Jordan </li></ul><ul><li>Morocco Syria </li></ul><ul><li>Tunisia Djibouti </li></ul><ul><li>Egypt Afghanistan </li></ul><ul><li>Lebanon Pakistan </li></ul>
  3. 3. Coverage of the Slow Recovery <ul><li>How have these countries fared after being aggravated by the worldwide economic slump? </li></ul><ul><li>What has taken effect to help ease out the MENAP region’s oil importers? </li></ul>
  4. 4. Exports Rising Once Again <ul><li>As displayed in activity from MENAP’s top 3 oil importers, exports have been climbing </li></ul><ul><li>Evidently, levels are not as high as from 2008 </li></ul><ul><li>This comeback is still regarded as uncertain </li></ul>
  5. 5. Financial Markets’ Nicely Bouncing Back <ul><li>These stock markets have nearly doubled, showing an even better recovery than exports did </li></ul><ul><li>Also, the remaining countries have been keeping up </li></ul><ul><li>In this respect, Tunisia has been doing an outstanding job </li></ul>
  6. 6. Meager Projections on Real GDP <ul><li>% Change in GDP for 2009 is predicted to be +3.6, for 2010 is +3.8 </li></ul><ul><li>These values are up from what was stated in the issue released in May 2009 </li></ul><ul><li>Growth is likely to continue in the same manner, rather gradually </li></ul>
  7. 7. Results of the downturn <ul><li>FDI and exports of merchandise were primarily affected </li></ul><ul><li>On a smaller scale, tourism and remittances fell </li></ul><ul><li>Although, MENAP oil-importing countries suffered a hit that was not too forceful overall </li></ul>
  8. 8. The mild slowdown… <ul><li>Advanced Manufacturing </li></ul><ul><li>The decline could have been worse </li></ul>
  9. 9. … induces a long, slow rebound <ul><li>Minor global integration softened the negative impact </li></ul><ul><li>At what cost? </li></ul><ul><li>The oil importers do not receive sufficient value, when it comes to production </li></ul>
  10. 10. Fighting Back With Various Policy Changes - Examples <ul><li>Egypt: +1% on expenditure, cutting of policy rates, maintain the 100% guarantee on deposits at banks </li></ul><ul><li>Morocco: raise public investment, increase low-end wages, reduce income tax </li></ul><ul><li>Tunisia: expedite investment projects, implement fiscal changes that equal 1.4% of 2009 GDP </li></ul>
  11. 11. Effects? <ul><li>Drop in inflation </li></ul><ul><li>Competition has been affected </li></ul><ul><li>As expected, there is still room for development </li></ul>
  12. 12. Factors of Recovery <ul><li>Domestic consumption will act as the main boost for MENAP’s oil importers </li></ul><ul><li>FDI, tourism, and remittances will not be able to pull back up so much </li></ul><ul><li>Energy costs are ascending </li></ul><ul><li>Imports likely to plunge </li></ul>
  13. 13. What’s in store for the future? <ul><li>Possible jumps in the price of oil </li></ul><ul><li>Poverty to remain; social stability will be stagnant </li></ul><ul><li>Sluggish recovery may harm businesses and the quality of loans, which would mean dwindling confidence in banks </li></ul><ul><li>Keep stimulus ongoing (stop when unnecessary), meanwhile focus on enhancing production sector </li></ul>