Regional Economic Outlook
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April 2024
Regional Economic Outlook for Asia and Pacific
April 29, 2024
Description:
Growth in Asia and the Pacific outperformed expectations in late 2023, reaching 5.0 percent for the year. Inflation has continued to decline, albeit at varying speeds: some economies are still seeing sustained price pressures, while others are facing deflationary risks.In 2024, growth is projected to slow modestly to 4.5 percent. Near-term risks are now broadly balanced, as global disinflation and the prospect of monetary easing have increased the likelihood of a soft landing. Spillovers from a deeper property sector correction in China remain an important risk, however, while geoeconomic fragmentation clouds medium-term prospects. Given the diverse inflation landscape, central bank policies need to calibrate policies carefully to domestic needs. Fiscal consolidation should accelerate to contain debt burdens and debt service cost, in order to preserve budgetary space for addressing structural challenges, including population aging and climate change.
Regional Economic Outlook, Western Hemisphere, April 19th, 2024
April 19, 2024
Description: The Latin America and the Caribbean region has shown remarkable resilience in the face of recent global challenges, rebounding more strongly than expected from the pandemic. Growth is now moderating, from 2.3% in 2023 to 2.0% in 2024, as most economies are operating at potential. This moderation is also due to a weaker external environment and the ongoing impact of tight policies aimed at curbing inflation.
Regional Economic Outlook for Europe, April 2024 | Soft Landing in Crosswinds for a Lasting Recovery
April 19, 2024
Description:
A soft landing for Europe’s economies is within reach. Securing the baseline of growth with price stability will require careful monetary policy calibration. Faster fiscal consolidation would ensure buffers are adequate to tackle future shocks, while structural fiscal reforms would help address mounting long-term expenditure pressures. Beyond the near-term recovery, raising potential growth prospects calls for efforts at both the domestic and European levels. Measures should aim to raise labor force participation, prepare the workforce for looming structural shifts, set an enabling environment for private investment, and promote innovation on a level European playing field—especially when it comes to the green transition, including through a strong commitment to carbon pricing. Greater European integration would amplify the effect of these reforms. Formulating an ambitious set of growth-enhancing reforms should be a key priority of a new EU commission.
Regional Economic Outlook for Sub-Saharan Africa, April 2024 | A Tepid and Pricey Recovery
April 19, 2024
Description:
After four turbulent years, the outlook for sub-Saharan Africa is gradually improving. Growth will rise from 3.4 percent in 2023 to 3.8 percent in 2024, with nearly two thirds of countries anticipating higher growth. Economic recovery is expected to continue beyond this year, with growth projections reaching 4.0 percent in 2025. Additionally, inflation has almost halved, public debt ratios have broadly stabilized, and several countries have recently issued Eurobonds, ending a two-year hiatus from international markets. However, not all is favorable and risks to the outlook remain tilted to the downside. The funding squeeze persists as the region’s governments continue to grapple with financing shortages, high borrowing costs, and impending debt repayments. Amid the challenges, sub-Saharan African countries will need additional support from the international community to develop a more inclusive, sustainable, and prosperous future.
Regional Economic Outlook for the Middle East and Central Asia, April 2024: An Uneven Recovery amid High Uncertainty
April 18, 2024
Description:
An Uneven Recovery amid High Uncertainty The Middle East and North Africa and the Caucasus and Central Asia regions are positively impacted by the resilience of the global economy. Lower global commodity prices and vigilant policy responses have helped ease inflation in most countries. However, uncertainty and risks have risen amid ongoing conflicts, shipping disruptions, and reduced oil production. This is leading to an uneven recovery across the Middle East and Central Asia, with growth rates varying this year. Policymakers need to ensure economic stability and debt sustainability while navigating geopolitical risks and improving medium-term growth prospects. Amid high uncertainty, it is essential that countries implement reforms to enhance their fundamentals, including by strengthening institutions. Additionally, countries can seize potential economic opportunities amid shifting trade patterns by reducing long-standing trade barriers, diversifying products and markets, and improving infrastructure.
January 2024
Regional Economic Outlook: Middle East and North Africa
January 31, 2024
Description:
Conflict Compounding Economic Challenges
The conflict in Gaza and Israel is yet another shock to the Middle East and North Africa (MENA) region. It
is causing immense human suffering and exacerbating an already challenging environment for
neighboring economies and beyond. This Update covers economies in the MENA region and does not
discuss developments in Israel. Overall, the major factors weighing on regional growth in MENA are
(i) the impact of the conflict; (ii) oil production cuts (even as robust non-oil sector activity continues to
support growth in several oil exporters); and (iii) continued necessary tight policy settings in several
economies. Social unrest has also picked up. Projected growth in the MENA region this year is
downgraded by 0.5 percentage point to 2.9 percent (relative to the October 2023 Regional Economic
Outlook: Middle East and Central Asia), from already weak growth of 2.0 percent in 2023. Primarily driven
by the ongoing conflict in Sudan, average growth across low-income countries (LICs) in MENA is forecast
to remain negative this year, continuing the estimated sharp decline in 2023. Disinflation is expected to
continue in most MENA economies, although price pressures have proven persistent in some cases
because of country-specific factors.
The outlook for the MENA region is highly uncertain, and downside risks are resurgent. An escalation or
spread of the conflict beyond Gaza and Israel, as well as an intensification of the disruptions in the Red
Sea, could have a severe economic impact, including on trade and tourism.
The appropriate policy response will depend on countries’ exposure to the conflict, preexisting
vulnerabilities, and policy space. Crisis management and precautionary policies will be critical where the
impact is acute, or risks are elevated. Elsewhere, countries will need to continue to fortify buffers.
Monetary policy will need to remain focused on price stability, and fiscal policy should be tailored to
country needs and available fiscal space. Structural reforms remain critical to boosting growth and
strengthening resilience in both the near and longer terms.
November 2023
Restoring Price Stability and Securing Strong and Green Growth
November 8, 2023
Description:
Restoring Price Stability and Securing Strong and Green Growth
Europe is at a turning point. After last year’s crippling energy price shock caused by Russia’s invasion of Ukraine, Europe faces the difficult task of restoring price stability now while securing strong and green growth in the medium term. Economic activity has started to cool and inflation to fall as a result of monetary policy action, phasing-out supply shocks, and falling energy prices. Sustained wage growth could, however, delay achieving price stability by 2025. Failing to tackle inflation now will risk additional growth damage in a world exposed to structural shocks from fragmentation and climate change. These global headwinds add to Europe’s long-standing productivity and convergence problems. To lift Europe’s potential for strong and green growth, countries need to remove obstacles to economic dynamism and upgrade infrastructure. This will strengthen business-friendly conditions and investment. Cooperation at the European level and with international partners will position Europe as a leader in the climate transition and support economic stability across the continent.
October 2023
Regional Economic Outlook: Western Hemisphere, October 2023
October 13, 2023
Description:
Securing Low Inflation and Nurturing Potential Growth After a stronger-than-expected recovery from the pandemic and continued resilience in early 2023, economic growth in Latin America and the Caribbean (LAC) is softening as the effect of tighter policies to combat inflation is taking hold and the external environment is weakening. The early and swift monetary tightening across the region since 2021, together with the withdrawal of most of the pandemic fiscal stimulus and the reversal of external price pressures, have helped put headline inflation on a downward trajectory. Core inflation has also started to ease, as price pressures are becoming less generalized, although it remains elevated amid strong labor markets and positive output gaps in some countries. Banking systems have weathered the rise in interest rates well and are generally healthy, though credit to the private sector is decelerating amid tighter supply conditions and weaker demand.
Regional Economic Outlook for Asia and Pacific, October 2023
October 13, 2023
Description:
Challenges to Sustaining Growth and Disinflation
The Asia-Pacific region remains a key driver of global growth in 2023, despite facing headwinds from changing global demand from goods to services and tighter monetary policies. The region is expected to grow by 4.6 percent in 2023, up from 3.9 percent in 2022. However, growth is projected to slow to 4.2 percent in 2024 and 3.9 percent in the medium term, as China's structural slowdown (Chapter 3 explains) and lower productivity growth in many other economies dampen the region's potential. Inflation is expected to decline in 2024 and stay within central bank target ranges in most countries, a faster pace of disinflation than in other regions (Chapter 2 explains.) Risks to the outlook have become more balanced than they were six months ago, although they still lean to the downside.
Regional Economic Outlook for the Middle East and Central Asia, October 2023
October 12, 2023
Description:
Building Resilience and Fostering Sustainable Growth Across the Middle East and Central Asia, the combined effects of global headwinds, domestic challenges, and geopolitical risks weigh on economic momentum, and the outlook is highly uncertain. Growth is set to slow this year in the Middle East and North Africa region, driven by lower oil production, tight policy settings in emerging market and middle-income economies, the conflict in Sudan, and other country-specific factors. In the Caucasus and Central Asia, although migration, trade, and financial inflows following Russia’s war in Ukraine continue to support economic activity, growth is set to moderate slightly this year.