GCC region’s non-hydrocarbon growth momentum remains strong: IMF

The GCC region’s non-hydrocarbon growth momentum remains strong, driven by higher domestic demand, increased gross capital inflows, and reform implementation, the International Monetary Fund (IMF) said in a report today, Dec. 14.

A comprehensive package of policies should be implemented to respond to near-term shocks and uncertainty and to firmly address medium- and long-term challenges. Oil production – which depends on OPEC+ decisions – will be subdued in the near term. Inflation is contained and current account surpluses are high, the IMF added.

In the near term, fiscal policy should remain prudent, avoiding procyclical spending and using the windfall from higher oil prices to rebuild buffers.

In the medium term, GCC countries should continue pursuing fiscal consolidation consistent with ensuring intergenerational equity and sustainability.

The IMF affirmed that structural policies should continue focusing on diversifying the economies away from hydrocarbon.