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World Bank Official calls for GCC Budgetary Reforms
May 16, 2015, 3:32 pm
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Senior Director of the World Bank Group’s Global Practice on Macroeconomics and Fiscal Management Marcelo Giugale expected the world economy to grow by 2.9 percent in 2015 and 3.2 percent next year.

The projections are based on specific data and practical scenario away from any risks that might stem from lower growth rate in the Chinese economy, higher interest rates by the US Federal Reserve, or the Greek crisis, he told reporters here on Thursday.

Giugale arrived here earlier on Thursday on a visit to Kuwait as part of a tour of the Gulf region that will take him also to the United Arab Emirates, Saudi Arabia and Qatar. He reiterated the WB call on the Gulf Cooperation Council (GCC) member countries to correct the imbalances in their budgets, rationalize subsidy, diversify the sources of income and reduce reliance on oil revenues under the current decline of the oil prices.

The GCC states need to adapt their budgets to the current oil prices and accelerate the economic reforms in order to ensure a better future for the coming generations, he stressed. The senior WB official lauded the improvement brought about in Kuwait since his last visit to the country two years ago. He expected the Indian economy to grow by a higher pace than the Chinese economy by next year.

On the risks facing the world economic recovery in the short run, the WB official said these include a possible decision by the Fed this autumn to ratchet up the interest rates which could lead to reverse the current course of liquidity from the US to other economy. A possible rise of the USD interest rate could also affect negatively the US exports and the exports of other countries, he noted, warning against shrinkage of more Eurozone economies.

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