Role of GCC towards global, regional economy hailed
MUSCAT — Growth in the Gulf Cooperation Council (GCC) is forecast to pick-up to 4.1 per cent in 2014 as oil production rises and the non-oil sector benefits from the large infrastructure projects being implemented, according to Nemat Shafik, Deputy Managing Director of the International Monetary Fund (IMF). Shafik make the comment in a statement issued on Saturday at the conclusion of a meeting in Riyadh, with the finance ministers and central bank governors of the six-nation GCC bloc. “I am grateful for the opportunity to meet with the finance ministers and central bank governors of the GCC. At a time when the global economy is still struggling to rebound from the global crisis in a meaningful way, organisations such as the GCC that bring together countries in a cooperative spirit to discuss and solve mutual problems have proven effective and are needed more than ever,” the official said.
He hailed the contribution of the GCC countries to the global and regional economy. “The GCC countries remain pillars of stability in the global oil market at a time when uncertainties are arising elsewhere. Moreover the remittance outflows from expatriates working in the region and the generous financial assistance provided are important income sources for other countries.” While prospects remain challenging for many countries throughout the Arab World, the GCC economies are continuing to perform well, Shafik stated. Growth is projected at 3.7 per cent this year, lower than the exceptionally strong average rate of 6.4 per cent in 2010–12, but favourable by global standards, he noted. Shafik broadly commended the fiscal policies of the Gulf states. “Given the substantial buffers that have been built-up in recent years, fiscal policy is well positioned to respond to the challenges that may stem from the continued uncertain global environment.
“Fiscal consolidation is needed over the medium-term, and this has been set in motion in most countries this year. Continuing on this consolidation path next year is appropriate, although fiscal policy has room to respond to external shocks. Macroprudential policies can be used to prevent any possible build up of risks in the financial system.” National programmes to support employment generation also came in for particular praise. “Creating jobs for the young and growing working age population in the region is a key challenge. The GCC is successfully creating jobs, but additional reforms could help in containing the growth of public sector jobs to reset expectations and realign incentives and strengthening education outcomes to create a high-skilled workforce. “At the same time, it is important to consider ways of further expanding employment opportunities for women,” the official added in conclusion.
(OEPPA Business Development Dept)