http://www.worldbank.org/globaloutlook More than two years after the Arab Spring began, economic activity remains weighed down by elevated political tensions and continued civil strife in the region. Regional growth accelerated to 3.5 percent in 2012 from minus 2.2 percent in 2011 reflecting mainly a rebound in Libya’s crude oil production to pre-war levels that doubled real GDP and a weak growth recovery in Egypt (to 2.2 percent in FY2012 from 1.8 percent in FY2011).

1. 1
Tehmina S. Khan
World Bank
June 2013
Global
Economic
Prospects
Middle East & North
Africa
Regional Outlook
http://www.worldbank.org/globaloutlook

2. Regional growth remained weighed down by political
tensions and conflicts during 2012

3. -6
-4
-2
0
2
4
6
8
10
2009 2010 2011 2012e
Other* Egypt Syria
Libya Iraq Iran
Algeria MENA Aggregate
Percent contribution to developing MENA GDP growth
* Jordan, Tunisia, Morocco, Lebanon and Yemen
Source: World Bank
Regional growth remained weighed down by political
tensions and conflicts during 2012

4. -6
-4
-2
0
2
4
6
8
10
2009 2010 2011 2012e
Other* Egypt Syria
Libya Iraq Iran
Algeria MENA Aggregate
Percent contribution to developing MENA GDP growth
3.5%
* Jordan, Tunisia, Morocco, Lebanon and Yemen
Source: World Bank
Regional growth remained weighed down by political
tensions and conflicts during 2012

5. Regional growth remained weighed down by political
tensions and conflicts during 2012
-6
-4
-2
0
2
4
6
8
10
2009 2010 2011 2012e
Other* Egypt Syria
Libya Iraq Iran
Algeria MENA Aggregate
Percent contribution to developing MENA GDP growth
3.5%
* Jordan, Tunisia, Morocco, Lebanon and Yemen
Source: World Bank
-2.2%

6. -6
-4
-2
0
2
4
6
8
10
2009 2010 2011 2012e
Other* Egypt Syria
Libya Iraq Iran
Algeria MENA Aggregate
Percent contribution to developing MENA GDP growth
3.5%
* Jordan, Tunisia, Morocco, Lebanon and Yemen
Source: World Bank
-2.2%
Regional growth remained weighed down by political
tensions and conflicts during 2012

7. Inflation remains persistently high in several
economies
0
5
10
15
20
25
30
35
40
45
0
5
10
15
20
25
30
35
40
45
IRQ MAR ALG JOR TUN EGY LBN YEM IRN
Latest Inflation Inflation Peak 2012
% y/y % y/y
Source: World Bank, National Statistical Offices

8. Inflation remains persistently high in several
economies
0
5
10
15
20
25
30
35
40
45
0
5
10
15
20
25
30
35
40
45
IRQ MAR ALG JOR TUN EGY LBN YEM IRN
Latest Inflation Inflation Peak 2012
% y/y % y/y
Source: World Bank, National Statistical Offices

9. Large fuel and food subsidies have added to fiscal
and current account pressures in several economies

10. 0
2
4
6
8
10
12
14
0
10
20
30
40
50
60
DJI MAR MRT TUN IRQ LBN JOR LBY YMN ALG EGY IRN
Nat ur al Gas (LHS)
El ect r i ci t y ( LHS)
Pet r ol eum(LHS)
Tot al Fuel subsi des as % of GDP, RHS
% of total revenues % of total GDP
Source: IMF (2013)
Fuel subsidies in MENA economies
Large fuel and food subsidies have added to fiscal
and current account pressures in several economies

11. Growth prospects critically depend on the evolution of
domestic and cross-border political tensions and conflicts

12. -3
-2
-1
0
1
2
3
4
5
6
7
00-09a 2010 2011 2012 2013 2014 2015
Aggregate Regional Growth
GDP growth, %
Source: World Bank. Estimates for 2012 and forecasts from 2013 onwards
Growth prospects critically depend on the evolution of
domestic and cross-border political tensions and conflicts

13. -3
-2
-1
0
1
2
3
4
5
6
7
00-09a 2010 2011 2012 2013 2014 2015
Aggregate Regional Growth
Algeria
Egypt, Arab Rep.
Iran, Islamic Rep.
GDP growth, %
Source: World Bank. Estimates for 2012 and forecasts from 2013 onwards
Growth prospects critically depend on the evolution of
domestic and cross-border political tensions and conflicts

14. Heightened political tensions and simmering
sectarian conflicts pose risks to this outlook

15. Weakening macroeconomic fundamentals and rising
fiscal sustainability risks are a major cause of concern
-20
-15
-10
-5
0
5
10
15
20
25
0
20
40
60
80
100
120
140
160
Egypt
Lebanon
Jordan
Morocco
Yemen
Tunisia
Algeria
Iran
Iraq
Libya
Fi scal Bal (% of GDP 2011, RHS)
Fi scal Bal (% of GDP 2012, RHS)
Publ i c Debt (% of GDP, 2012)
Source: IMF, World Bank

16. Risks and Vulnerabilities
Source: IMF, World Bank
• Protracted weakness in the Euro
zone

17. Risks and Vulnerabilities
Source: IMF, World Bank
• Protracted weakness in the Euro
zone
• Projected gradual decline in
commodity

18. 18
Tehmina S. Khan
World Bank
June 2013
Global
Economic
Prospects
Middle East & North
Africa
Regional Outlook
http://www.worldbank.org/globaloutlook