São Paulo – The Middle East and North Africa has not been as affected by the international economic crisis as the other regions of the world. The information was taken from the Global Financial Development 2009 report: Charting a Global Recovery, of the World Bank. “The Middle East and North Africa region was affected in a less direct way than other regions, but local capital and real estate markets are under intense pressure,” informs the World Bank.
The financial institution forecasts a 3.1% increase in the Gross Domestic Product (GDP) of the Middle East and North Africa this year, of 3,8% next year, and of 4.6% in 2011. According to the World Bank, there should be a reduction in exports of services from the region and of foreign direct investment in 2009. The reason for the slowdown of growth in the region, according to the report, is the low price of oil, and the local economic situation should persist as long as the commodity’s prices remain low in the global market.
The World Bank also underscores that Latin America and the Caribbean were strengthened as they entered the period of world financial crisis. “With a much more solid financial, fiscal and monetary foundation than in the past,” says the institution. However, according to the report, the countries in the region are also suffering the consequences of low pricing for agricultural commodities and of the withdrawal of foreign funds from their markets. The forecast is for the region’s economy to retract by 2.3% in 2009, and by 2% next year.
Private capital inflows into developing countries as a whole, however, should decrease by nearly half this year, according to the World Bank. They should total US$ 363 billion, a much lower figure than the US$ 707 billion recorded in 2008. It is worth noting that the figure for last year already represented a strong reduction compared with 2007, when capital inflows totalled US$ 1.2 billion. The report informs that the world is entering a phase of slower growth, which should demand greater control over the financial system.
The forecast of the World Bank is that developing countries should grow 1.2% this year. Last year, the GDP growth rate in the region was 5.9%, and in 2007, 8.1%. If China and India are excluded, however, then the GDP of the remaining developing countries is estimated to decrease by 1.6%. In global terms, a negative growth of 2.9% is expected in 2009.
*Translated by Gabriel Pomerancblum
