Middle East/Central Asia economic prospects improving: IMF
International Monetary Fund (IMF), in its Middle East and Central Asia Regional Outlook, stated (25-Oct-2010) that with the global economy on the mend, prospects for the Middle East and Central Asia region have improved. Almost every country in the region is projected to grow faster in 2010 and 2011 than in 2009. Given this pickup, most of the region’s countries plan to exit from fiscal stimulus by 2011 while maintaining an accommodative monetary policy stance for some time. IMF added that with the rebound in crude oil prices and production, the oil-exporting countries of the Middle East and North Africa will see visible improvements in their fiscal and external balances in 2010–11. Going forward, further efforts at financial sector development and economic diversification top the agenda. The region’s oil-importing countries, which include Afghanistan and Pakistan, have weathered the global recession well. Pakistan, however, suffered from devastating floods in July/August, which will hold back growth this year. The overriding longer-term challenges for these countries are to raise growth and provide jobs for expanding populations. In the Caucasus and Central Asia, recovery has gained momentum in virtually all countries aided by the lagged effect of fiscal stimulus and a favourable external environment. Exports are picking up, and remittances are rebounding, though at a slowing pace. Despite the broadly positive outlook, however, risks are largely on the downside. A priority is to resolve banking sector problems and, in some countries, to reduce external debt and current account deficits.