RIYADH, Oct 26 (KUNA) -- Managing Director of the International Monetary Fund (IMF) Christine Lagarde expected the GCC economies to grow by 1.7 percent in 2016 and 2.3 percent next year after the 3.4 percent growth rate of 2015.
"All GCC countries have begun welcome reforms to respond to low oil prices," she said at a joint press conference on Wednesday evening with Saudi Minister of Finance Dr. Ibrahim Al-Assaf.
Lagarde made the comments after her meetings with Saudi King Salman Bin Abdulaziz Al Saud, Al-Assaf and Governor of the Saudi Monetary Authority (SAMA) Ahmed Alkholifey.
She also attended the meeting of the GCC finance ministers and central bank governors where Kuwait was represented by Deputy Prime Minister, Minister of Finance and Acting Minister of Oil Anas Al-Saleh.
On these meetings she said: "We discussed the economic outlook and current policy developments in Saudi Arabia. I was also pleased to participate in the GCC finance ministers and central bank governors meeting, where we exchanged views on the region's outlook, challenges, and policy priorities." "The meeting is an important forum for policymakers to discuss issues facing the region and possible avenues for policy cooperation.
On the financial reforms in Saudi Arabia she said: "Saudi Arabia has begun a major policy shift to respond to low oil prices." "Vision 2030 and the National Transformation Program (NTP) contain ambitious policy reforms to reduce the economy's reliance on oil, strengthen non-oil growth, and increase employment opportunities. "These reforms are very welcome. I look forward to the authorities laying out, prioritizing, and sequencing the policy measures to be implemented, with a view to reducing the risk of implementation bottlenecks and allowing businesses and individuals time to adjust. "Fiscal adjustment has started, with the government containing expenditures and raising additional revenues. "These efforts should continue over the medium-term including through further increases in energy prices which are still low by international standards, further revenue-raising measures including from the planned introduction of excises and the VAT (value added tax) at the GCC level, and further spending restraint," she went on. "Turning to the GCC, the reforms that the GCC countries have been implementing over the past year in response to the decline in oil prices are impressive. Continued fiscal adjustment will be needed over the medium term. "Where possible, countries should phase in deficit-reduction measures gradually, while strengthening their medium-term fiscal frameworks and fiscal transparency to support the adjustment. Policies to support growth and employment will also need to continue. "Over the past year, the IMF has further strengthened its relationship with the GCC countries through our regular country visits, our technical assistance, and our training program. "The IMF stands ready to continue to support the GCC countries in addressing their challenge of adjusting to the lower oil price environment. "I thank Dr. Ibrahim Al-Assaf -- 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, and look forward to our continued cooperation," Lagarde concluded.
On his part, Dr. Al-Assaf said the talks with the IMF Managing Director focused on two topics, namely how to diversify the sources of income in the GCC states and the structural reforms needed to increase productivity.
Regarding the US dollar bonds, issued by Saudi Arabia, he said the first tranche attracted large number of investors which signals the confidence of international partners in the Saudi economy.
"The issuance of such bonds is not confined to a specific period of time," he added.
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