Improvements in Europe's economy provide tailwinds for growth in Egypt

The Arab Countries in Transition (ACTs) have had diverging trajectories over the past year and face an uncertain outlook, according to a working paper released Wednesday by the IMF entitled "Arab Countries in Transition - Economic Outlook and Key Challenges."

This paper showed that improvements in the European economy, lower oil prices, and some progress on the policy front have provided tailwinds to growth, which is expected to pick up significantly in Egypt and Morocco.

At the same time, the unemployment rate remains high. Moreover, several of the ACTs have also suffered from intensifying and spreading conflicts that cause widespread human suffering and sizeable economic challenges.

Libya and Yemen are directly affected, while spillovers from these conflicts and the civil wars in Iraq and Syria weigh on Jordan and Tunisia, as well as other countries in the region such as Lebanon, Djibouti, Turkey, and European nations.