Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement today at the conclusion of a meeting in Kuwait with the finance ministers and central bank governors of the Gulf Cooperation Council (GCC)¹ and the inauguration of the IMF-Middle East Center for Economics and Finance.

“I am grateful for the opportunity to meet with the finance ministers and central bank governors of the GCC. At a time of continuing challenges in the global economy, forums such as this are important to provide a platform for policymakers to share views and come together to solve problems in a cooperative way.

“I value our cooperation with the GCC. The IMF-Middle East Center for Economics and Finance, which I inaugurated today with H.E. Minister Al-Saleh, is an outstanding example of how the IMF and the GCC countries can work together to achieve their mutual goals. With the support of the Kuwaiti government, this Center is well-established as a premier location for economics training for government officials and it has now provided training to more than 3,600 officials from the 22 countries of the Arab League The training being provided through this center will help us build a brighter future together.

“The GCC economies have been amongst the best performing in the world in recent years. The near-term outlook is positive, with growth of about 4½ percent projected in 2014–15. Particularly, growth in the non-oil sector is expected to remain strong at about 6 percent, driven by large investments in infrastructure and private sector confidence.

“Oil prices have fallen by about 25 percent 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, in almost all GCC countries it increases the urgency for fiscal consolidation in the medium-term.

“There is scope to strengthen policy frameworks in the GCC to support economic management. On the fiscal side, this could involve reforms to the annual budget process and the introduction of a medium-term budget framework. Regarding macroprudential policies, the introduction of a formal macroprudential policy framework would clarify responsibilities and coordination among regulators.

“The future success of the GCC economies will be closely tied to ongoing efforts to boost the employment of nationals in the private sector and to increase economic diversification. Many policies are being implemented to achieve these objectives, and important progress is being made. Nevertheless, getting the economic incentives right so as to encourage workers to seek employment in the private sector and firms to produce in exported-oriented sectors is a key missing element of policies to date.

“I thank H.E. Anas Khalid Al-Saleh, Minister of Finance for Kuwait, for chairing the GCC meeting and for his generous hospitality. I also thank Dr. Abdul Latif bin Rashid Al-Zayani, the GCC Secretary General.”

¹ The GCC is comprised of Bahrain, Kuwait, Oman, Saudi Arabia, Qatar, and the United Arab Emirates.