Estimating Potential Growth in the Middle East and Central Asia
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
The Middle East and Central Asia’s economic growth potential is slowing faster than in other emerging and developing regions, dampening hopes for reducing persistent unemployment and improving the region’s generally low living standards. Why? And is it possible to alter this course? This paper addresses these questions by estimating potential growth, examining its supply-side drivers, and assessing which of them could be most effective in raising potential growth. The analysis reveals that the region’s potential growth is expected to slow by ¾ of a percentage point more than the EMDC average over the next five years. The reasons behind this slowdown differ across the region. Lower productivity growth drives the slowdown in the Caucasus and Central Asia and is also weighing on growth across the Middle East (MENAP); while a lower labor contribution to potential growth is the main driver in MENAP. Moving forward, given some natural constraints on labor, total factor productivity growth is key to unlocking the region’s higher growth potential. For oil importers, raising physical capital accumulation through greater investment will also play an important role.
Series:
Working Paper No. 2015/062
Subject:
Commodities Financial crises Global financial crisis of 2008-2009 Labor Oil Oil prices Prices Production Total factor productivity
English
Publication Date:
March 20, 2015
ISBN/ISSN:
9781475545364/1018-5941
Stock No:
WPIEA2015062
Pages:
27
Please address any questions about this title to publications@imf.org