The IMF discusses the current economic situation and challenges that lay ahead for the Middle East and Central Asia.
The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confi dence has fallen sharply recently, and downside risks are growing. Global growth is projected to moderate to about 4 percent through 2012 from over 5 percent in 2010. Real GDP in advanced economies, and emerging and developing economies, is expected to expand by about 2 percent and 6 percent, respectively (see table).
The slowdown refl ects both anticipated and unanticipated developments. The strong cyclical rebound in global industrial production and trade in 2010 was never expected to persist. However, in crisis-hit advanced economies, especially the United States, the handover from public to private demand is taking more time than anticipated. In addition, sovereign debt and banking sector problems in the euro area have proven much more tenacious than expected. Furthermore,
disruptions resulting from the Tohoku earthquake and tsunami in Japan, as well as the spreading unrest in the Middle East and North Africa (MENA) and the related surge in oil prices, were major surprises.