How Gulf economies prove 'resilience' from global crises
The coordination of fiscal and monetary policies has proven how resilient Gulf economies are, allowing them to sustain global crises, a Gulf Cooperation Council official said. As long as monetary policy does not affect fiscal policy’s independence, it is crucial that there is coordination between both, clarified Khalid Al Sunaidi, the GCC’s Assistant Secretary General for Economic and Development Affairs and representative from Oman.Monetary policy focuses on government policies implemented through the central bank, while fiscal policy is based on taxes and government spending. Both play a hand in a country’s economic activity. Al Sunaidi was speaking at a World Governments Summit panel session on Tuesday, along with other senior Gulf economic executives. Stay up to date with the latest news. Follow KT on WhatsApp Channels.He drew upon examples from history where global economies took a hard hit, such as during the Great Depression in 1929 and the Great Inflation of 1970s. He said that one of the main reasons for these economic disasters, he said, was due to a lack of coordination between fiscal and monetary policies.Sheikh Bandar bin Mohammed Al Thani, the governor of Qatar Central Bank and chairman of the Qatar Investment Authority, echoed the GCC official’s sentiments, stating that global crises have proven that the resilience of Gulf economies limited the “great impact of these crises,” he said.“Look, we know that, of course, all economies are globally linked in one way or another,” he explained. “But global crises have proven, in a rare way, that the resilience of the Gulf economies has limited the great impact of these crises.”Nonetheless, the GCC states are not exempt from economic turmoil, Al Thani added. “There are external crises, economic and geopolitical, and also global transformations in trade and supply chains, and so on,” he said, explaining that fixed exchange rates allowed the GCC to sustain the impact from these shocks.UAE stands out with a balanced budget amid regional deficitsGCC faces indirect but significant risks from trade war
The coordination of fiscal and monetary policies has proven how resilient Gulf economies are, allowing them to sustain global crises, a Gulf Cooperation Council official said.
As long as monetary policy does not affect fiscal policy’s independence, it is crucial that there is coordination between both, clarified Khalid Al Sunaidi, the GCC’s Assistant Secretary General for Economic and Development Affairs and representative from Oman.
Monetary policy focuses on government policies implemented through the central bank, while fiscal policy is based on taxes and government spending. Both play a hand in a country’s economic activity.
Al Sunaidi was speaking at a World Governments Summit panel session on Tuesday, along with other senior Gulf economic executives.
Stay up to date with the latest news. Follow KT on WhatsApp Channels.
He drew upon examples from history where global economies took a hard hit, such as during the Great Depression in 1929 and the Great Inflation of 1970s. He said that one of the main reasons for these economic disasters, he said, was due to a lack of coordination between fiscal and monetary policies.
Sheikh Bandar bin Mohammed Al Thani, the governor of Qatar Central Bank and chairman of the Qatar Investment Authority, echoed the GCC official’s sentiments, stating that global crises have proven that the resilience of Gulf economies limited the “great impact of these crises,” he said.
“Look, we know that, of course, all economies are globally linked in one way or another,” he explained. “But global crises have proven, in a rare way, that the resilience of the Gulf economies has limited the great impact of these crises.”
Nonetheless, the GCC states are not exempt from economic turmoil, Al Thani added. “There are external crises, economic and geopolitical, and also global transformations in trade and supply chains, and so on,” he said, explaining that fixed exchange rates allowed the GCC to sustain the impact from these shocks.
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