This edition of the Middle East andNorth Africa (MENA) regional economic update shows thatrecovery in the region is below historical trends. Itseconomic prospects depend on global developments andcontinued strengths in emerging-market demand and oil pricetrends. Growth in the region is expected to average 4% in2010, an increase of slightly less than 2 percentage points(pp) over growth in 2009 and weak compared to increases of5.6pp in advanced economies and 4.5pp in developing nations.Only by 2011 and 2012 is MENA s growth expected to return tothe average rates achieved prior to the economic andfinancial crisis. Recovery has been driven by the globaleconomic rebound and, to varying degrees, by domesticstimulus. Industrial production, which in MENA is dominatedby oil, has nearly reached its pre-crisis peak, largely dueto the strong recovery in emerging markets, especially Asia.However, the upturn has weakened in recent months becausethe global slowdown has arrived sooner and is occurringfaster than previously anticipated, and there are seriousconcerns about the sustainability of the global recovery. Inresponse, MENA governments have continued to stimulate theireconomies in 2010, and even those that did not use any typeof fiscal stimulus in 2009 have started implementing fiscalmeasures in 2010. The economic recovery in MENA has beenmuch less vigorous than the recovery in countries thatsuffered sharp output contractions. The sustainability ofthe recovery in Gulf Cooperation Council (GCC) economiesdepends on developments in the rest of the world, and on theextent to which they affect oil markets. The outlook for theglobal economy and oil markets in the second half of 2010remains uncertain, and a decline in oil prices cannot beruled out.
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