Gulf Economic Monitor, February 2018 : Deepening Reforms
This second edition of the twice-yearly Gulf Economic Monitor describes recent economic developments, near-term prospects, and broader reform priorities in the Gulf Cooperation Council (GCC) countries (The Pulse of the Region). Regional aggregate...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/561441521461573349/Deepening-reforms-in-focus-pension-systems-in-the-Gulf http://hdl.handle.net/10986/29514 |
| Summary: | This second edition of the twice-yearly
Gulf Economic Monitor describes recent economic
developments, near-term prospects, and broader reform
priorities in the Gulf Cooperation Council (GCC) countries
(The Pulse of the Region). Regional aggregate GDP growth in
2017 weakened to just 0.5 percent, weighed down by oil
production cuts and tighter fiscal policy that took a toll
on non-oil growth. Prospects, however, are for a gradual
strengthening, helped by the partial recovery in energy
prices, the expiration of oil production cuts after 2018,
and an easing of fiscal austerity. Aggregate growth in the
region is expected to strengthen to 2.1 and 2.7 percent in
2018 and 2019, respectively. Risks to the outlook include
potential external headwinds resulting from the tightening
of monetary policy in advanced economies and/or geopolitical
tensions that lead to volatility in global financial markets
or commodity prices. Although fiscal and external balances
are improving, the region continues to face large financing
needs among both sovereigns and corporates, and thus remains
vulnerable to volatility in global capital flows and the
cost of funding. Finally, the reform agendas under
consideration in GCC countries are necessarily complex and
require considerable political resolve. The Monitor also
describes how, following three years of sustained fiscal
adjustments to lower oil prices, the GCC countries, led by
the Kingdom of Saudi Arabia, are shifting attention towards
deeper structural reforms. These are needed to breathe new
life into sluggish domestic economies, create jobs for young
people and strengthen private investment, to broaden the
economic base and to anchor longer term fiscal
sustainability. The report, however, cautions against policy
complacency stemming from the recent partial recovery in oil
prices that leads to loss in reform momentum. Instead, it
urges countries to double down on reforms in order to secure
the long term futures of their economies and their people.
The final part of the report includes an analytical In Focus
section that discusses the sustainability, equity, and
welfare challenges confronting regional pension systems. |
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