Middle East and North Africa Economic Monitor, October 2014

Middle East and North Africa Economic Monitor, October 2014

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The economic outlook for the Middle East and North Africa (MENA) region in 2015 is slightly more favorable than in 2013-14, when the region as a whole grew at 3 percent a year. The World Bank groupa€™s latest MENA Economic Monitor projects MENAa€™s economic growth to average 5.2 percent in 2015 driven by domestic consumption, easing political tensions crowding-in investments in Egypt and Tunisia, and full resumption of oil production in Libya. However the violent conflicts in Syria, Iraq, Gaza, Yemen and Libya with their spillovers to Lebanon and Jordan could make MENAa€™s economic prospects bleak. The report has a special focus on the corrosive nature of the large energy subsidies in MENA. The MENA region is currently experiencing growth below potential, high unemployment, urban air pollution and congestion, and severe water scarcity that is undermining agriculture. The report shows how energy subsidies have contributed to these development challenges. Reforming these subsidies, therefore, should be one of the highest priorities of policymakers.Real GDP grew by an estimated 5.2% in 2013 and is expected to pick up further to 5.5% in 2014. Oil production ... One recent spending initiative relating to government wage scales has increased the total wage bill by more than 50 percent. The Ministry ... Moreover, increases in public sector employment, pay and benefits make it more difficult for the private sector, especially the SME sector , to compete.

Title:Middle East and North Africa Economic Monitor, October 2014
Author:Shantayanan Devarajan
Publisher:World Bank Publications - 2014-11-10


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