During 2007 the Middle East and North Africa Region(MENA) experienced average growth of 5.7percent. This was the fifth year in a row in whichthe region grew at a rate higher than 5 percent, exceedinglevels reached in the 1990s and early 2000s.This performance occurred in the context of an externalenvironment marked by three major developments:a continued rise in the price of hydrocarbons,turbulence in international financial marketsfollowing the sharp drop in market valuations ofU.S. mortgage- backed securities, and a sharp rise inthe price of non- oil commodities, especially foodstuffs.These developments have affected the variousMENA economies in different ways. On average,however, the region has done well, withrespectable growth and comfortable external andfiscal balances. Similar performance, that is, averagegrowth of about 5.6 percent, is expected over thenext three years. Oil prices are expected to remainbuoyant, leading to high levels of investment andremittance flows within the region. Food prices arealso expected to remain high. Because most countriesin the region subsidize food and energy, highfood prices will lead to fiscal pressures for many governments.But such pressures are not expected tochoke off economic growth. Global financial turbulenceand a likely slowdown of growth in the Organisationfor Economic Co- operation and Development(OECD) countries are expected to beoffset by continued robust spending among oilexportingcountries and vibrant expansion in Chinaand India.
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