IMF Expects 6.5 Percent GDP Growth for GCC Countries

The International Monetary Fund calls on the Gulf countries to maintain financial policies that ensure sustainability and increase savings (AFP)
The International Monetary Fund calls on the Gulf countries to maintain financial policies that ensure sustainability and increase savings (AFP)
TT
20

IMF Expects 6.5 Percent GDP Growth for GCC Countries

The International Monetary Fund calls on the Gulf countries to maintain financial policies that ensure sustainability and increase savings (AFP)
The International Monetary Fund calls on the Gulf countries to maintain financial policies that ensure sustainability and increase savings (AFP)

GDP growth in the Gulf Cooperation Council (GCC) is expected to double this year, reaching 6.5 percent, a report issued by the International Monetary Fund (IMF) revealed.

Surging commodity prices have limited the spillovers from the war in Ukraine and the impact from tighter global financial conditions, and have allowed for a more positive outlook for GCC economies, according to IMF.

“Our analysis suggests that GCC countries will save far more resources than during previous episodes because of the fiscal and structural reforms taken in the region. In 2022 alone, the overall fiscal surplus will amount to over $100 billion, as the rise in expenditures—particularly on wages—remains contained so far,” the fund said.

“While GCC countries have benefited from higher, albeit volatile, oil and gas prices, numerous risks still cloud the outlook—notably a slowdown in the global economy. In this context, the reform momentum established in previous years should be maintained,” it added.

The report recommended implementing a comprehensive package of policies in order to respond to near-term shocks and firmly address the medium-and long-term challenges.

These policies include, “using additional revenues from higher oil prices to rebuild buffers and strengthen policy space.”

“Given the available fiscal space, targeted support for the most vulnerable can be prioritized, leveraging the progress made on digitalization.”

It also called for “keeping medium-term fiscal policy geared towards ensuring fiscal sustainability and increasing savings, through a credible fiscal framework.”

“Over the long term, this is critical to ensure equity between generations and a smooth energy transition out of fossil fuels. This can be supported through non-oil revenue mobilization and energy subsidy phase-out, which will also contribute to climate change mitigation.”

Other supporting measures include “the gradual reduction of public sector wage bills and increasing spending efficiency - for example, through continuing reforms to improve procurement and investment planning.”

The fund also said that “a proper assessment of the fiscal stance will require fully incorporating GCC sovereign wealth funds’ operations, given their role in diversifying savings from oil revenues and their involvement in national development strategies.”

The report demanded “maintaining financial sector stability, which is essential to sustaining strong economic growth.”

“As a result of high oil prices and abundant liquidity, which are facilitating credit expansion, GCC bank balance sheets are currently shielded from tighter global financial conditions. However, bank soundness should continue to be carefully monitored.”

The IMF concluded that “accelerating ongoing structural reforms, including by raising female labor force participation, increasing flexibility for expatriate workers, improving education quality, further leveraging technology and digitization, enhancing regulatory frameworks, strengthening institutions and governance, and deepening regional integration.”

“Implementing policies for sustained private sector-led economic growth and diversification will be as key as ever.”



Saudi Arabia Pledges $25 Bln Investment to Support Africa

Engineer Waleed Al-Khuraiji attends Africa Day reception in Riyadh (Asharq Al-Awsat)
Engineer Waleed Al-Khuraiji attends Africa Day reception in Riyadh (Asharq Al-Awsat)
TT
20

Saudi Arabia Pledges $25 Bln Investment to Support Africa

Engineer Waleed Al-Khuraiji attends Africa Day reception in Riyadh (Asharq Al-Awsat)
Engineer Waleed Al-Khuraiji attends Africa Day reception in Riyadh (Asharq Al-Awsat)

Saudi Arabia on Wednesday announced ambitious plans to scale up its diplomatic and economic presence in Africa, aiming to boost its investments on the continent to more than $25 billion by 2030, as part of a broader strategy to strengthen development and economic partnerships with African nations.

Deputy Foreign Minister Waleed Al-Khuraiji said the Kingdom intends to expand its network of embassies across the continent to more than 40 in the coming years, underscoring Riyadh’s commitment to deepening its engagement with Africa.

Speaking at a reception marking Africa Day at the Cultural Palace in Riyadh’s Diplomatic Quarter, Al-Khuraiji revealed that Saudi Arabia would provide $10 billion in export financing and secure an additional $5 billion in development funding for African countries by the end of the decade.

“Africa holds a central position in the Kingdom’s foreign policy and diplomatic outreach,” Al-Khuraiji said, noting that Saudi Arabia is keen to enhance cooperation in trade, integration, and multilateral coordination on shared global issues.

He added that the Kingdom has already contributed more than $45 billion to development and humanitarian projects in 54 African countries.

Of that, over $450 million was provided by the King Salman Humanitarian Aid and Relief Center to support efforts in 46 African nations.