Arab Spring economies to recover slowly in 2013: IMF

11 Nov, 2012

 

In its twice-yearly outlook for the Middle East and North Africa, the global lender said a partial return of political stability could permit somewhat faster growth in the combined output of Egypt, Jordan, Morocco, Libya, Tunisia and Yemen during 2013.

 

But weak demand in Europe and other regions will weigh on the Arab Spring states, it said. In many of those countries, exports are shrinking and have not yet bottomed out, it added.

 

"Growth is expected to remain below long-term trends, and unemployment is expected to increase owing to continued anaemic external demand, high food and fuel commodity prices, regional tensions and policy uncertainty."

 

The IMF forecast gross domestic product in the six countries combined would expand by 3.6 percent next year, accelerating from an estimated 2.0 percent this year and 1.2 percent in 2011. In 2010, the year before the uprisings, GDP grew 4.7 percent.

 

Because of sluggish global demand, the group's current account balance of trade in goods and services will improve only marginally next year, to a deficit of 4.6 percent of GDP from this year's 5.4 percent deficit, the IMF predicted.

 

It suggested some countries should consider allowing greater flexibility in their exchange rates - code for permitting their currencies to depreciate - in order to stimulate exports, but did not specify which countries.

 

Copyright APP (Associated Press of Pakistan), 2012

Copyright Reuters, 2012

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