Southern and Eastern Mediterranean: a Fragmented Economic Area

South and East Mediterranean countries constitute a heterogeneous economic region. Economies differ when we look at the level and path of economic development, the structure of the productive sector or the development strategies put in place. Macroeconomic situation of all countries improved during the 2000s. But this positive dynamic reversed during the 2010s for most of the countries because of a three-pronged negative choc: spillovers from the European crisis, political tensions and, for oil-exporters, the fall in oil and gas prices. At end-2019, several countries have to deal with significant macroeconomic imbalances. Besides these imbalances, countries of the region face three common challenges: low trade integration, poorly diversified economies and a dysfunctional labor market.