Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier)...
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Transcript of Global outlook: Two-speed recovery in motion Real GDP Growth (percent change from a year earlier)...
Regional Economic OutlookFall 2010
Afghanistan
Pakistan
IranIraq
Saudi Arabia
Yemen
Oman
United Arab EmiratesQatar
Bahrain
Kuwait
Sudan
LibyaAlgeria
Morocco
Mauritania
LebanonSyria
Jordan
Egypt
Tunisia
Djibouti
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)
4
Prospects for World GDP Growth(percent change)
Downside risks remain, but global double-dip unlikely
Rebalancing is needed along two dimensions
Demand from external surplus economies
5
Demand from external deficit economies
Private demand
Publicdemand
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)
Oil demand is accelerating with the broadening of the global recovery but supply buffers are still substantial
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 to emerging markets pick up
Sep. 10
MENAP Oil Exporters
IranIraq
Saudi Arabia
Yemen
Oman
United Arab EmiratesQatar
Bahrain
Kuwait
Sudan
LibyaAlgeria
Overview — Oil Exporters
Recovery continues
• Oil production picks up, fiscal/external balances improve
• But private sector is lagging• Fiscal space allowing continued stimulus in
some countries
Risks/medium term challenges
• Keep eye on inflation• Financial sector development and stability• Reorienting spending, reducing reliance on
oil revenues
Global demand recovers, boosts activity
Sources: National authorities; and IMF staff estimates.
MENAP Oil Exporters
GCC Growth
Non-oil Real GDP Growth(Annual change, percent)
Real GDP Growth(Annual change, percent)
Sources: National authorities; and Fund staff estimates and calculations. Sources: National authorities; and Fund staff estimates and calculations.
27.8
…and external balances rebound
Sources: National authorities; and IMF staff estimates.
2008 2009 2010 2011-15
-10
-5
0
5
10
15
20
25
30
GCC
Algeria, Iran, Iraq, Libya
Sudan, Yemen
Current account balances; percent of GDP and billions of US dollars
MENAP Oil Exporters
$257
$75$101 $124$107
$5$23 $31
-$6
-$10
-$7-$7
GCC External Balances
Sources: National authorities; and Fund staff estimates and calculations.
Gross International Reserves(Billions of U.S. Dollars)
Current Account Balance(Percent of GDP)
Sources: National authorities; and Fund staff estimates and calculations.
442 409 433 456
…as do fiscal balances
Sources: National authorities; and IMF staff estimates.
2008 2009 2010 2011-15
-10
-5
0
5
10
15
20
25
30
GCC
Algeria, Iran, Iraq, Libya
Sudan, Yemen
Fiscal balances; percent of GDP
MENAP Oil Exporters
GCC Fiscal Balances
Sources: National authorities; and Fund staff estimates and calculations.
Government Fiscal Balance(Percent of GDP)
Sources: National authorities; and Fund staff estimates and calculations.
Government Non-oil Fiscal Balance(Percent of non-oil GDP)
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)
Many countries approaching break-even prices
Sources: National authorities; and IMF staff estimates.
20 30 40 50 60 70 80 90 100 110 1200
20
40
60
80
100
120
140
160
YMNSDN
LBY
IRQ
IRN
ALG
UAE
SAU
QAT
OMNKWT
BHR
Break-even Price for Current account
Bre
ak-e
ven
Pri
ce fo
r Fi
scal
bal
ance
Average oil price in 2010
MENAP Oil Exporters
Aug-09 Nov-09 Feb-10 May-10 Aug-10-10
-5
0
5
10
15
20
Other oil exporters¹QATIRNSAUSDNYMN
Consumer price index; annual percentage change
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
0 5 10 15 20 250
5
10
15
20
25
YMN
SDN
LBY
ALG
IRN¹
UAE
SAUQAT
BHR
OMN
KWT
Nonperforming loans (Percent of total loans)
Cap
ital
ad
equ
acy
rati
o(P
erce
nt
of r
isk-
wei
ghte
d a
sset
s)
Financial sector strength
MENAP Oil Exporters
Policy priorities
MENAP Oil Exporters
Financial market
development
Managing international
financial linkages
Diversification
MENAP Oil Importers
Afghanistan
Pakistan
Morocco
Mauritania
LebanonSyria
Jordan
Egypt
Tunisia
Djibouti
Recovery • Growth picking up
Policy adjustment• Can start consolidating fiscal positions• In most cases, inflation not an immediate
concern
Medium term challenges
• More than 18 million new jobs required by 2020
• Need to improve competitiveness and reorient trade
Overview — Oil Importers
Trade recovery is moving aheadAnnual 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.
0
1
2
3
4
5
6
7
8
9
10
AFG
DJILBN
JOR
EGYMRT
MAR
PAK
SYR
TUN
China
India
EM Total
Annual percentage change
MENAP Oil Importers
2011
Progress in fiscal consolidation
-10 -8 -6 -4 -2 020
30
40
50
60
70
80
90
58.8
74.2
63.0
88.5
49.9
58.7
26.9
43.0
34.9
2010 2011
Fiscal balance (Percent of GDP)
Publ
ic d
ebt
(Per
cent
of G
DP)
Fiscal consolida-tion
Source: National Authorities; and IMF staff estimates and projections.
MENAP Oil Importers
Most can maintain current monetary stance
Sources: Haver Analytics; and national authorities.
0
1
2
3
4
5
6
5.1
4.4
3.23.4
0.6
4.2
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)
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
5
10
15
20
25
30
35Emerging and developingeconomies
MENAP oil importers
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
Policy prioritiesEducation
Labor market flexibility
Competitiveness
Reorient exports toward new growth engines
Jobs and Growth
MENAP Oil Importers
Credit growth is stagnant
Sources: National authorities; and IMF staff estimates.
MENAP Oil Exporters
2007 2008 2009 2010P0
5
10
15
20
25
30
35
40
GCC
Non-GCC MENAP oil exporters
Credit growth(In percent)