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The International Monetary Fund (IMF) has forecast a 4.5 per cent growth for the GCC in 2014-15, with the non-oil sector set to grow six per cent annually
According to Christine Lagarde, managing director of IMF, the GCC economies are amongst the best performing in recent times, and the near-term outlook is positive.
Particularly, growth in the non-oil sector is expected to grow steadily at six per cent every year, and is being driven by investments from private sectors, added a statement from IMF.
Lagarde said, “Oil prices have fallen by about 25 per cent since the summer, and this will affect fiscal and external balances in the region. While the substantial fiscal buffers that have been built-up in most countries over the past decade will allow governments to maintain spending plans in the near-term, it increases urgency for fiscal consolidation in the medium term for almost all GCC countries.”
The region has scope to strengthen policy frameworks in the GCC to support economic management and a medium-term budget framework could be included, added IMF officials.
Employing nationals in the private sector and increasing economic diversification could eventually contribute to the success of GCC economies. Lagarde said that several policies are being implemented to achieve these objectives.