“Banking systems in the GCC generally appear well-placed to weather lower oil prices, weaker growth, and higher U.S. interest rates. Nevertheless, as oil revenues decrease, external financing conditions tighten, and government debt issuance increases, central banks will need to remain vigilant for stresses in the system and provide liquidity to the financial sector if needed. Macroprudential policy can also help manage any systemic stresses in the financial system if they were to emerge.
“Governments should continue to take steps to switch the focus of growth away from the public and toward the private sector. With some 2 million people likely to enter the labor force in the GCC by 2020, and given the fiscal constraints on further increasing government employment, private sector job creation needs to be stepped up. Governments are already implementing many policies in this direction, and important progress is being made. Nevertheless, continued efforts are needed to encourage nationals to seek employment in the private sector and for firms to hire them.
“The IMF will continue to deepen its relationship with the GCC through regular country visits, technical assistance, and training. We stand ready to support the GCC countries in any way they see appropriate as they address the challenges of lower oil prices.
“I thank H.E. Mr. Al-Emadi, Minister of Finance for Qatar, for chairing the GCC meeting and for his government’s generous hospitality. I also thank Dr. Abdul Latif bin Rashid Al-Zayani, the GCC Secretary General.”
