MUSCAT: The Gulf Cooperation Council economies continue to demonstrate resilience despite a challenging global environment, according to a new regional assessment published by the International Monetary Fund (IMF). The Fund notes that although external balances have narrowed due to oil production cuts and rising imports, overall conditions across the GCC “remain strong,” supported by robust non hydrocarbon activity and firm domestic demand.

In its Enhancing Resilience to Global Shocks report, the IMF underscores that the regional outlook is becoming increasingly uncertain. “The economic outlook remains favorable but risks are tilted to the downside,” it stated, highlighting the impact of global uncertainty. The report adds that medium term risks are shaped by “ongoing global structural shifts,” which create “two sided risks for the GCC economies.”

A central message in the Fund’s assessment is the urgency of advancing reforms that strengthen resilience beyond the oil cycle. The IMF notes that countries should “focus on building resilience and accelerating economic diversification irrespective of oil prices.” The report also points out that many GCC economies benefit from sizable fiscal buffers that support reform implementation and help navigate external shocks.

On monetary and financial policy, the IMF describes existing frameworks as having “served the GCC well,” while emphasizing the need to continue strengthening policy transmission and financial market depth. The banking sector remains on a solid footing, but the Fund cautions that amid global volatility, authorities should remain attentive to evolving risks through macroprudential oversight.

Structural reforms also feature prominently in the assessment. The Fund notes that while the business environment has improved, “further progress can be achieved,” particularly in areas that support private sector development and long term competitiveness. The report stresses the importance of ongoing efforts to enhance productivity, improve labour market outcomes, and support non-oil sector expansion.

The IMF report also highlights the need to continue developing financial markets to mobilize long term capital and support diversification. It notes that maintaining “prudent fiscal policies and debt management strategies” will complement broader reform efforts. Expanding regional and international economic integration is likewise important, with the Fund noting that fostering more diverse economic relationships can help mitigate the impact of global uncertainty.

Ultimately, the IMF concludes that the GCC’s ability to navigate a rapidly shifting global landscape will depend on sustaining reform momentum and strengthening the foundations of non hydrocarbon growth. Building resilience “irrespective of oil prices” remains at the core of this transition.

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