Gulf Cooperation Council Gcc Oil Prices Financial Stability And The Use Of Countercyclical Macroprudential Policies In The Gcc
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Gulf Cooperation Council Gcc Oil Prices Financial Stability And The Use Of Countercyclical Macroprudential Policies In The Gcc
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2015-10-12
Gulf Cooperation Council Gcc Oil Prices Financial Stability And The Use Of Countercyclical Macroprudential Policies In The Gcc written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-10-12 with Business & Economics categories.
Economic and financial developments in the GCC economies are interwoven with oil price movements. GCC economies are highly dependent on oil and gas exports. Oil price upturns lead to higher oil revenues, stronger fiscal and external positions, and higher government spending. This boosts corporate profitability and equity prices and strengthens bank balance sheets, but can also lead to the buildup of systemic vulnerabilities in the financial sector. Banks in the GCC are well-capitalized, liquid, and profitable at present, and well-positioned to manage structural systemic risks. However, oil-macro-financial linkages mean that asset quality and liquidity in the financial system may deteriorate in a low oil price environment and financial sector stress may emerge. The scope for amplification of oil price shocks through the financial sector suggests a role for a countercyclical approach to macroprudential policies. Countercyclical macroprudential policy can prove useful to reduce the buildup of systemic risks in the financial sector during upswings, and to cushion against disruption to financial services during periods of financial sector stress. The GCC countries have considerable experience with implementing a wide range of macroprudential policies, but these policies have not generally been adjusted through the cycle. GCC central banks implemented several macroprudential measures before the global financial crisis and have continued to enhance their macroprudential frameworks and toolkits to limit systemic financial sector risks. Although there is some evidence of macroprudential tools being adjusted in a countercyclical way, most of the tools have not been adjusted over the financial cycle. Further enhancements to the GCC macroprudential framework are needed to support the countercyclical use of these policies. A comprehensive and established framework, supported by strong institutional capacity, is essential for countercyclical macroprudential policies. This framework should provide clear assignment of responsibilities and guidance on how policies will be implemented to maintain financial stability and manage systemic risks over the financial cycle. Addressing data gaps and the further development of reliable early warning indicators in signaling potential systemic stress are needed to help guide the countercyclical use of a broad set of macroprudential policies. Expanding the countercyclical policy toolkit and its coverage can help address emerging financial sector risks. The implementation of countercyclical capital buffers and dynamic loan loss provisions could boost resilience in line with systemic risks faced in GCC economies. At the same time, using existing macroprudential policies countercyclically would prove useful to address emerging financial sector risks in a more targeted way. Expanding the coverage of macroprudential tools to nonbanks can help boost effectiveness by reducing leakages.
Handbook Of Research On Sociopolitical Factors Impacting Economic Growth In Islamic Nations
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Author : Ozdemir, Suleyman
language : en
Publisher: IGI Global
Release Date : 2017-07-12
Handbook Of Research On Sociopolitical Factors Impacting Economic Growth In Islamic Nations written by Ozdemir, Suleyman and has been published by IGI Global this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-12 with Business & Economics categories.
Over the years, the dissemination of technology across society has increased exponentially. As technology continues to improve worldwide connectivity, positive relations between countries is paramount to achieving cultural and economic progression. The Handbook of Research on Sociopolitical Factors Impacting Economic Growth in Islamic Nations is a pivotal scholarly resource on the current factors impacting international relations between Islamic countries. Featuring extensive coverage on sociopolitical structures, economic sector analysis, sociocultural properties, and political policies, this publication is ideal for academicians, students, and researchers interested in discovering more about the current trends and techniques in the economic infrastructures of Islamic nations.
Gulf Cooperation Council
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2017-12-14
Gulf Cooperation Council written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-12-14 with Business & Economics categories.
Effective liquidity management is important to promote macro-financial stability in the GCC countries. Fixed exchange rate regimes provide credible nominal anchors in the GCC countries, but combined with open capital accounts, they also entail limited monetary policy independence. At the same time, high dependence on hydrocarbon revenue has made the region vulnerable to oil price-driven liquidity swings. And the latter can affect monetary policy implementation, including by exacerbating credit and asset price cycles. This highlights the importance of frameworks aimed at forecasting liquidity and ensuring appropriate liquidity levels through the timely absorption or injection of liquidity by central banks. Over the past decade, liquidity management in the GCC countries has been based mainly on passive instruments. Abundant liquidity during times of high oil prices have placed liquidity absorption at the center of the central bank operations. Reserve requirements have helped absorb liquidity but have not been used very actively. Standing facilities, another key instrument, are more passive in nature, with the amount of liquidity absorbed or injected driven by banks rather than monetary authorities. Central banks bills or other instruments have also been used, but issuance has not systematically been based on market principles. In addition, these operations have been constrained by limited liquidity forecasting capability and the shallow nature of interbank and domestic debt markets.
Saudi Arabia
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Author : International Monetary Fund. Middle East and Central Asia Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2015-10-15
Saudi Arabia written by International Monetary Fund. Middle East and Central Asia Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-10-15 with Business & Economics categories.
This Selected Issues paper assesses the importance of oil and interest rate spillovers for Saudi Arabia. Oil prices have fallen by more than 40 percent since mid-2014 while the Federal Reserve is expected in the coming months to begin raising its policy rate at the beginning of a gradual tightening cycle. Given the importance of oil to the economy and the peg of the riyal to the U.S. dollar, these are two key developments for Saudi Arabia. Although a temporary drop in oil prices would likely have little effect on the economy and banks given the financial cushions that have been built-up, a longer-lasting period of low oil prices would have a more significant impact.
Saudi Arabia
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Author : Mr.Ahmed Al-Darwish
language : en
Publisher: International Monetary Fund
Release Date : 2015-03-17
Saudi Arabia written by Mr.Ahmed Al-Darwish and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-03-17 with Business & Economics categories.
Saudi Arabia: Tackling Emerging Economic Challenges to Sustain Strong Growth
Macroprudential Policy In The Gcc Countries
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Author : Ms.Zsofia Arvai
language : en
Publisher: International Monetary Fund
Release Date : 2014-02-01
Macroprudential Policy In The Gcc Countries written by Ms.Zsofia Arvai and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-02-01 with Business & Economics categories.
As undiversified commodity exporters, GCC economies are prone to pro-cyclical systemic risk in the financial system. During periods of high hydrocarbon prices, favorable economic prospects make the financial sector keen to lend, leading to higher domestic credit growth and easier access to external financing. Fiscal policy is a very important tool for macroeconomic management, but due to the significant time lags and expenditure rigidities, it has not been a flexible enough tool to prevent credit booms and the build-up of systemic risk in the GCC. This, together with limited monetary policy independence because of the pegged exchange rate, means that macro-prudential policy has a particularly important role in limiting systemic risk in the financial system. This importance is reinforced by the underdeveloped financial markets in the region that provide limited risk management tools and shortcomings in crisis resolution frameworks. This paper will discuss the importance of macro-prudential policy in the GCC countries, look at the experience with macro-prudential policies in the boom/bust cycle in the second half of the 2000s, and use the broad frameworks being developed in the Fund and elsewhere to discuss ways existing frameworks and policy toolkits in the region can be strengthened given the characteristics of the GCC economies.
Gulf Cooperation Council Gcc Economic Prospects And Policy Challenges For The Gcc Countries
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2013-11-13
Gulf Cooperation Council Gcc Economic Prospects And Policy Challenges For The Gcc Countries written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-11-13 with Business & Economics categories.
The global and regional economic environment remains challenging. Global growth remains tepid, and although some pick-up is expected, risks are tilted to the downside. Recent volatility in financial markets is having a significant impact on some large emerging markets, highlighting the challenges that will be faced in unwinding the Federal Reserve’s quantitative easing policy. Geopolitical uncertainties in the Middle East are also high.
Macroprudential Policy And Financial Stability In The Arab Region
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Author : Ananthakrishnan Prasad
language : en
Publisher: International Monetary Fund
Release Date : 2016-05-20
Macroprudential Policy And Financial Stability In The Arab Region written by Ananthakrishnan Prasad and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-05-20 with Business & Economics categories.
Several characteristics of the structure of the Arab economies, their economic policy framework, and their banking systems make macroprudential policy a particular relevant tool. For most oil exporters, heavy reliance on the extractive sector for generating fiscal revenues and export earnings translates into increased vulnerabilities to oil price shocks. In the case of oil importers, relatively small external and fiscal buffers make them highly vulnerable to shocks. This paper discusses the experience of Arab countries in implementing macroprudential policies and contains recommendations to strengthen their macroprudential framework.
Gulf Cooperation Council
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2017-12-14
Gulf Cooperation Council written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-12-14 with Business & Economics categories.
Global economic activity is gaining momentum. Global growth is forecast at 3.6 percent this year, and 3.7 percent in 2018, compared to 3.2 percent in 2016. Risks around this forecast are broadly balanced in the near term, but are skewed to the downside over the medium term. The more positive global growth environment should support somewhat stronger oil demand. With inflation in advanced countries remaining subdued, monetary policy is expected to remain accommodative. GCC countries are continuing to adjust to lower oil prices. Substantial fiscal consolidation has taken place in most countries, mainly focused on expenditure reduction. This is necessary, but it has weakened non-oil growth. With the pace of fiscal consolidation set to slow, non-oil growth is expected to increase to 2.6 percent this year, from 1.8 percent last year. However, because of lower oil output, overall real GDP growth is projected to slow to 0.5 percent in 2017 from 2.2 percent in 2016. Growth prospects in the medium-term remain subdued amid relatively low oil prices and geopolitical risks. Policymakers have made a strong start in adjusting fiscal policy. While the needed pace of fiscal adjustment varies across countries depending on the fiscal space available, in general countries should continue to focus on recurrent expenditure rationalization, further energy price reforms, increased non-oil revenues, and improved efficiency of capital spending. Fiscal consolidation should be accompanied by a further improvement in fiscal frameworks and institutions. The direction of fiscal policy in the GCC is broadly consistent with these recommendations. Policies should continue to be geared toward managing evolving liquidity situations in the banking system and supporting the private sector’s access to funding. While countries have made progress in enhancing their financial policy frameworks, strengthening liquidity forecasting and developing liquidity management instruments will help banks adjust to a tighter liquidity environment. Banks generally remain profitable, well capitalized, and liquid, but with growth expected to remain relatively weak, the monitoring of financial sector vulnerabilities should continue to be enhanced. Diversification and private sector development will be needed to offset lower government spending and ensure stronger, sustainable, and inclusive growth. This will require stepped-up reforms to improve the business climate and reduce the role of the public sector in the economy through privatization and PPPs. Reforms are needed to increase the incentives for nationals to work in the private sector and for private sector firms to hire them. Increasing female participation in the labor market and employment would benefit productivity and growth across the region. Where fiscal space is available, fiscal policy can be used to support the structural reforms needed to boost private sector growth and employment.
Gulf Cooperation Council Economic Prospects And Policy Challenges For The Gcc Countries
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Author : International Monetary Fund. Middle East and Central Asia Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2023-12-14
Gulf Cooperation Council Economic Prospects And Policy Challenges For The Gcc Countries written by International Monetary Fund. Middle East and Central Asia Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-12-14 with Business & Economics categories.
The GCC region’s non-hydrocarbon growth momentum remains strong, driven by higher domestic demand, increased gross capital inflows, and reform implementation. Oil production – which depends on OPEC+ decisions – will be subdued in the near term. Inflation is contained and current account surpluses are high. Fiscal balances remain healthy, supported by fiscal reforms and high oil prices. The primary non-oil deficits are expected to decrease to 24 percent of GDP by 2028, with higher non-oil revenue reflecting sustained fiscal and structural reforms and contained expenditures. High global uncertainty is weighing on the outlook.