Markets
The Middle East and North Africa (MENA) region has experienced high economic growth in recent years accompanied by increasing economic diversification and booming domestic demand. Real GDP growth has exceeded 6% in each of the past five years, which is more than double GDP growth in MENA in the 1990s with the strongest per capita growth performance for the region since the 1970s. Foreign Direct Investment has risen to unprecedented levels, targeting a myriad of services and manufacturing-related sectors, in addition to non-traditional activities.
Many of the MENA countries have demonstrated long awaited progress on reforms to improve the overall environment for economic growth. Monetary and fiscal reforms are underway, with some countries being further ahead than others, to improve their macroeconomic framework and fiscal sustainability and performance. Almost all of the countries in the region have taken significant steps to remove impediments to trade. Tariffs have been reduced throughout the region, from a simple average of 20% in 2000 to 13% by 2007, resulting in the strongest regional progress in trade reform.
The region's capital markets have responded to the changing situation, presenting new opportunities for investors worldwide to participate in what has been acknowledged as the world's fastest growing economic region. Although the MENA has only been peripherally affected to date by the global slowdown, uncertainty in the United States and elsewhere is expected to impact the MENA region, through a tightening of credit and other channels, in the coming months, with the downturn expected to be shorter than in other more developed areas. Despite the negative impact, the MENA is expected to outperform on economic growth boasting positive growth levels, compared to the very low projected growth levels elsewhere in the world. Real growth is expected to average 3.1% in 2009 in the MENA countries, compared to a worldwide contraction by 2.9%.