DUBAI, Dec. 12 (Xinhua) -- The International Monetary Fund (IMF) said Tuesday that despite the continuing stagnation of oil prices, the non-oil sector in Gulf Cooperation Council (GCC) states will perform better in 2018 as the global economy is gaining strength.
The remarks were made by Jihad Azour, director of the Middle East and Central Asia Department in the Washington-based IMF, at the sidelines of the 10th annual Arab Strategy Forum.
"Overall growth in the Gulf Cooperation Council (GCC) is projected to bottom out at about 0.5 percent in 2017, whereas its non-oil growth is expected to pick up to about 2.6 percent in 2018 as the global economy recovers to 3.7 percent next year, driven by China, the U.S., Europe and many emerging markets," Azour told reporters.
However, the growth in GCC would be still not enough to significantly reduce the 12-percent unemployment rate, he added.
Founded in 1981, the GCC comprises six Arab oil-rich states: Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates (UAE) and Oman.
According to the IMF, oil and gas account for about 75 percent of the total GCC government revenue and represent 65 percent of its total exports.
Azour also said the IMF expects oil prices to continue to trade in a corridor between 55 U.S. dollars per barrel to 60 dollars per barrel in 2018.
"The region is facing the need to additional borrowing next year, and the Gulf region shall speed up reforms and implement more fiscal discipline," he said.
"Saudi Arabia and the UAE are in an advantageous position as they have sufficient financial buffers, hence they can lengthen their fiscal reforms," Azour explained, pointing to their moves to slash subsidies for water, electricity and petrol in the wake of the slump in energy prices.
On the 5-percent value-added tax the GCC states will introduce on Jan. 1, 2018, he said the move "will have limited impact on prices, but it will help governments to diversify their revenues."
