## EXECUTIVE SUMMARY

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### A. Global developments and outlook
- Vaccination progress has reduced health and economic effects of COVID-19, but new variants have emerged and vaccine coverage remains uneven across countries.
- Global output growth projections:
  - "5.9 percent in 2021 and 4.9 percent in 2022, before moderating to around 3.3 percent over the medium term."
- Advanced economies to benefit from continued large policy support; emerging market and developing economies face lasting output losses due to lower vaccination rates and less policy support.
- Inflation:
  - Higher global inflation is projected to remain "transitory," driven by supply-demand disturbances and commodity price rebounds.
  - Outlook for inflation remains very uncertain because of pandemic path, supply disruptions, labor market recovery, and inflation expectations.
- Financial conditions:
  - "Financial conditions are generally supportive" due to substantial monetary and fiscal policy support; financial stability risks appear contained.
  - Downside risks include new variants, tighter external financial conditions, and reassessments of monetary policy that could tighten financing for economies with debt sustainability concerns.
- Oil market developments:
  - Global oil demand fell from 100 million barrels per day in 2019Q4 to 83 million barrels per day in 2020Q2, and increased to 94 million barrels per day in 2021Q2.
  - Global oil demand is expected to reach pre-pandemic levels "by end of 2022."
  - The Brent oil price surpassed its pre-pandemic level by around "14 percent." OPEC+ decided to boost production and ease production curbs.

### B. The economic and financial outlook in the GCC countries
- Immediate policy response:
  - GCC combined announced fiscal measures averaged "2.3 percent of GDP" and were complemented by macro-financial support measures.
- 2020 recessions:
  - GCC growth contracted by "4.8 percent in 2020," composed of declines of "5.9 percent in oil GDP" and "3.9 percent in non-oil GDP."
  - Fiscal and external balances moved into deficits of "8.8 percent of GDP" and "0.4 percent of GDP," respectively.
- 2021 recovery and projections:
  - Non-oil GDP in the GCC is expected to grow by "3.8 percent in 2021."
  - Real oil GDP growth is expected to be "0.3 percent in 2021" and "5.3 percent in 2022."
  - Overall real GDP growth for the GCC is projected at "2.5 percent in 2021."
- Cross-country variation in recovery:
  - Saudi Arabia: non-oil GDP projected to grow "4.7 percent in 2021."
  - Bahrain, Kuwait, UAE: non-oil GDP projected "around 3 percent."
  - Oman: non-oil growth projected "1½ percent."
  - Qatar: non-oil growth projected "2 percent."
  - Contact-intensive sectors account for around "34-36 percent of non-oil GDP" in Bahrain, Qatar, and UAE, compared to "26 percent in Saudi Arabia."
- Medium-term outlook and scarring risks:
  - Growth in GCC countries is expected to remain "some 4 percent below pre-pandemic trends throughout the forecast horizon," with significant cross-country variation; output gaps expected to close only gradually.
- Labor markets:
  - Despite increases in unemployment, labor markets have "weathered the pandemic relatively well."
  - Non-national employment fell during the pandemic and may be rebounding; national employment has held up better or increased.
  - Structural issues: fragmented labor markets, large public sectors employing nationals, private sector dominated by expatriates; female labor force participation remains less than half of male participation.
  - Recent reforms: Saudi Arabia, Bahrain, and the UAE passed legislations prohibiting gender-based discrimination in employment; Qatar introduced a minimum wage and abolished the sponsorship system for foreign workers.

### C. Fiscal outlook, public debt, and non-oil balances
- GCC overall fiscal deficit is expected to improve to -1.8 percent of GDP in 2021, reaching balance by 2023.
- Non-oil primary balances:
  - Deteriorated by about 3 percent of non-oil GDP in 2020.
  - Expected to improve to a deficit of around 35 percent of non-oil GDP in 2021.
- Public debt and debt service:
  - Average public debt levels increased from 24 percent of GDP in 2015 to 60 percent of GDP in 2021.
  - Average debt service burdens rose from about 7 percent of GDP in 2020 to about 10 percent of GDP in 2021.
  - Debt levels increased by an average of 12.8 percent of GDP from pre-pandemic levels, pushing overall debt to approximately 60 percent of GDP in 2021.
- Reserves and financing:
  - Foreign reserves declined by an average of 5 percent in 2020 compared to 2019.
  - Financing needs projected to decline by 5 percent in 2021 but expected to remain 3 percent above their pre-pandemic levels, on average.
  - Primary fiscal balances projected to deteriorate from pre-pandemic levels by an average of 2 percent of GDP in 2021.
- Permanent Income Hypothesis (PIH) assessment:
  - Gap between actual non-oil primary balances and sustainable counterparts estimated at 17 percent of non-oil GDP in 2021; projected to decline to 12 percent over the medium term.
  - Baseline PIH assumptions: 5.5 percent for returns on NFA, population growth of 1 percent, 2.0 percent for the US dollar deflator, and 2.5 percent of real GDP growth.
- Non-oil Debt Sustainability Analysis:
  - Average 30 percent gap between the debt-stabilizing primary non-oil balance and projected medium-term non-oil primary balance as a ratio of non-oil GDP.
  - Gap projected to decline in 2021 by an average of 19 percent from its 2014 level.
- Fiscal breakeven prices exceeded observed oil prices in 2021.

### D. Financial, monetary, and external sector developments
- Banking systems remain well-capitalized with modest but variable deterioration in asset quality and profitability.
- Private sector credit:
  - Credit growth halted in Oman but expected to improve in 2021.
  - UAE: credit to the private retail segment recovered; corporate lending continues to contract.
  - Saudi Arabia: credit growth remained positive and even accelerated.
- Support measures have maintained credit supply but risk vulnerabilities if unwinding is not carefully timed and managed.
- Inflation:
  - Expected to be contained below 3 percent on average in 2021 (range: Kuwait at 3.2 percent to Bahrain at 1.0 percent).
  - Expected to moderate to 2-2½ percent in 2022.
  - Saudi Arabia’s mid-2020 VAT increase caused a jump in inflation largely reversed in 2021 as the base effect disappeared.
- External sector:
  - Current accounts improving and expected to be substantially stronger in 2021 and onwards.
  - Service exports, particularly tourism (travel credit), remain below pre-pandemic levels for most countries.
  - Total external debt levels increased by an average of 28.7 percent of GDP in 2021; projected to decline by an average of 11.9 percent of GDP in 2022.
  - International reserves improved in 2021 after a decline of 5.8 percent in 2020; improvements reflect disbursements of SDR allocations, which average 1.5 percent of GDP.

### E. Risks to the outlook
- Downside risks:
  - Renewed rises in COVID-19 cases and uneven global vaccination progress; risk of new strains.
  - Tightening of global financial conditions could reverse capital flows, drive sovereign spreads higher, and squeeze public financing—especially in economies with limited fiscal buffers and reliance on external financing.
  - Appreciation of the U.S. dollar would undermine competitiveness of GCC non-oil sectors.
- Upside risks:
  - Higher oil prices would support public balance sheets and macroeconomic outlook but could induce pro-cyclical fiscal policies.
- Policy response:
  - Pursuing fiscal and structural reforms would strengthen macro-stability and raise potential growth.

### F. Climate change impacts, vulnerabilities, and policy responses
- Climate stressors and vulnerabilities:
  - Annual average temperature increased by 1.3°C since the turn of the millennium.
  - Precipitation averaged 6.7mm annually (1991–2020) compared to 16 mm for MENAP and 94 mm for the world.
  - Agriculture accounts for about 85 percent of total water consumption in Oman, Saudi Arabia, and UAE.
  - Urbanization accounts for approximately 50-60 percent of total water consumption in Bahrain and Qatar.
  - GCC (except Oman) among the 10 most-water stressed countries.
- Responses and mitigation/adaptation measures:
  - Energy sector targets: 20 percent in 2030 (Oman), 50 percent in 2030 (Saudi Arabia), 40 percent in 2040 (UAE).
  - Water management: dams in Oman and Saudi Arabia; wastewater reduction, recycle, and reuse measures.
  - Agriculture: sustainable practices including vertical and hydroponics; Oman investing in agriculture and fisheries.
  - Land degradation: green belts; Saudi Green Initiative and Middle East Green Initiative aim to plant 50 billion trees.
  - Marine protection: mangrove planting, coral reef restoration; artificial reefs (Bahrain and UAE).
  - Health and early warning systems; mandatory mid-day break for outdoor workers during summer.
  - Urban planning: expansion of metro systems (Saudi Arabia and UAE); green building initiatives.
  - Efficiency: district cooling systems (Qatar and UAE); fuel and water tariff reforms.
  - Carbon capture, utilization, and storage used by BAPCO (Bahrain), Aramco and SABIC (Saudi Arabia), and ADNOC (UAE).
  - Waste management: Qatar recycles construction waste; Saudi National Center for Waste Management (2019); Abu Dhabi Single Use Plastic Policy (2020).
  - Sustainable finance: UAE Guiding Principles in Sustainable Finance; Oman and UAE developing sustainable finance frameworks; Saudi Arabia developing an ESG agenda and plans to issue its first green bond in 2022.
  - International collaboration emphasized in NDCs for technology transfer and technical assistance.
- Transition risks:
  - Oil and gas are main sources of export and fiscal revenue; global mitigation efforts pose serious challenges for oil demand over the medium to long term.
  - Share of hydrocarbon receipts remains about 51 percent of revenues.
  - Structural and fiscal reforms are underway to increase share of other productive sectors and diversify export and fiscal revenues.

### G. Public health, macroeconomic policy stance, and withdrawal of support
- Public health priorities:
  - Continue vaccination rollout for all residents and maintain contingency health plans for recurrent outbreaks.
  - Stand ready to respond to renewed stress from reemergence of the pandemic or other potential shocks, such as oil price drops and shifts in global financial sentiment.
- Near-term macroeconomic policy:
  - Keep macroeconomic policies accommodative until recoveries are firmly established and be increasingly targeted.
  - Maintain fiscal support as needed, increasingly targeted to maximize efficiency and contain fiscal burdens.
  - In countries with limited policy space, maintain targeted support while identifying fiscal savings from cutting or reallocating non-priority spending.
  - Macro-financial policies should ensure liquidity and spur credit growth, targeted to viable firms and complemented by close monitoring of financial stability risks.
  - Extension of loan moratoria should be data-dependent and complemented by continued intense monitoring of financial stability risks.
  - Central banks should analyze the use of liquidity lines to gradually target and wind them down once the recovery is well under way.
- Medium- and long-term policy direction:
  - Fiscal policy should aim for "growth friendly consolidation" to ensure long-term fiscal and external sustainability:
    - Strengthen fiscal frameworks, further mobilize non-oil revenues, and increase spending efficiency.
    - Avoid procyclical spending when oil prices rise; use windfalls to rebuild policy space.
  - Financial sector:
    - Manage current stress, legacy risks, and emerging vulnerabilities.
    - Strengthen insolvency and resolution frameworks, reinstate some prudential measures eased during the crisis, and step up supervisory efforts.
  - Structural reforms to support sustained growth and diversification:
    - Raise female labor force participation, increase flexibility for expatriate workers, improve education quality, further leverage technology, enhance regulatory frameworks, deepen regional integration, and address climate change.

### H. Financial sector stability and reform priorities
- Financial sector soundness:
  - Expedite strengthening of insolvency and resolution frameworks to help banks deal with crisis legacy loans; ensure swift recognition of impairment and resolution of bankrupt borrowers while targeting distressed but viable borrowers.
  - Ensure adequate bank buffers to reduce the length and severity of any negative credit cycle.
  - Close monitoring of credit standards among SMEs and corporations, paired with intense supervision of banks and other financial institutions.
  - Gradually reinstate prudential measures relaxed in 2020 and work with affected banks on restoring buffers, including restoring pre-pandemic asset classifications where relaxed.
  - Consider constraints on dividend distribution, if needed, to ensure banks’ buffers are adequate.
- Financial market development and inclusion:
  - Develop a yield curve and increase market liquidity through secondary markets trading.
  - Focus stock market reforms on enhancing corporate governance and investor protection.
  - Remove restrictions on foreign ownership and encourage financial market competition.
  - Harness digital solutions and fintech to expand financial inclusion, especially of women, youth, and SMEs.
- Systemic risk reduction and data gaps:
  - Address systemic risks from links between public, financial, and real sector balance sheets through credible fiscal adjustment and reform to ensure economic diversification.
  - Continue progress in building statistical capacity and closing data gaps, particularly for balance sheet data for the broader public sector, non-bank financial institutions, and the private sector.

### I. Reviving diversification, competitiveness, and medium-term growth
- Structural reform priorities:
  - Facilitate resource reallocation within and across sectors; improve and utilize bankruptcy frameworks; reduce distortions that favor the public sector in labor and financial markets.
  - Encourage labor force participation of nationals, particularly females, by removing explicit and implicit barriers and providing more maternity and childcare support.
  - Adopt more flexible policies for expatriates to avoid abrupt declines in labor supply and reduce the wage gap between nationals and expats.
  - Improve the quality of education and training to reduce structural mismatches and deliver world-class quality.
  - Enhance regulations and governance to mobilize private sector and foreign direct investment in the non-oil sector:
    - Reduce restrictions on foreign ownership,
    - Align tax treatments of local and foreign firms,
    - Reduce preferential treatments for government-related entities,
    - Improve transparency and accountability in the public sector,
    - Strengthen AML/CFT frameworks.
  - Promote digitalization (regulatory sandboxes in Bahrain and Saudi Arabia; UAE Data Law; Oman National Digital Economy Program).
- Exchange rate regime:
  - Pegged exchange rate regimes remain appropriate for GCC economies.
  - More flexible exchange rates over time could support development of non-oil tradable sectors but would remove a credible monetary anchor that delivers low and stable inflation.
  - Fiscal consolidation and competitiveness-enhancing structural reforms would foster private-sector-led growth, ensure external sustainability and support the peg.
  - Strengthening liquidity management and forecasting frameworks and deepening domestic money and capital markets would help support more active monetary policy frameworks in the future.

### J. Regional integration, climate action, and concluding priorities
- Regional integration:
  - The Al-Ula Declaration from January this year is expected to boost intra-regional trade, tourism, and financial flows; deeper integration and improved business environment could attract additional FDI.
- Climate and resilience:
  - Climate change policies are critical given dependence on hydrocarbons; reforms include cleaner energy targets, energy efficiency, water management, land and coastal management, and carbon capture deployment.
  - Further policy efforts and cooperation are essential to manage transition risks, rebuild financial buffers, diversify revenues, and protect vulnerable households and businesses with cash transfers, social safety nets, and retraining.
- Concluding policy balance:
  - Near-term: secure public health and mitigate immediate economic and social effects; keep macro policies accommodative and targeted; maintain contingency plans.
  - Medium-term: achieve durable and growth-friendly fiscal consolidation geared toward diversification and inclusive growth, promote gender equality, address climate vulnerabilities, manage financial sector stress and legacy risks, and accelerate reforms to drive productivity and diversification.

*Prepared by Erik Lundback (Lead), Abdullah AlHassan, Imen Benmohamed, Haytem Troug, Yang Yang, and Dalia Aita under the guidance of Ali Al-Eyd. Editorial support was provided by Esther George.*

### EXECUTIVE SUMMARY ___________________________________________________________________________ 3

### EXECUTIVE SUMMARY

### A. Global Developments and Outlook
- Vaccination progress has reduced health and economic effects of COVID-19, but new variants have emerged and vaccine coverage remains uneven across countries.
- Global output growth projections:
  - "5.9 percent in 2021 and 4.9 percent in 2022, before moderating to around 3.3 percent over the medium term."
- Advanced economies are projected to benefit from continued large policy support; emerging market and developing economies face lasting output losses due to lower vaccination rates and less policy support.
- Inflation:
  - Higher global inflation is projected to remain "transitory," driven by supply-demand disturbances and commodity price rebounds.
  - Outlook for inflation remains very uncertain because of pandemic path, supply disruptions, labor market recovery, and inflation expectations.
- Financial conditions:
  - Financial stability risks appear contained and "financial conditions are generally supportive" due to substantial monetary and fiscal policy support.
  - Risks are tilted to the downside: new variants, tighter external financial conditions, and reassessments of monetary policy could tighten financing conditions and harm economies with debt sustainability concerns.
- Oil market developments (Box 1):
  - Global oil demand fell from 100 million barrels per day in 2019Q4 to 83 million barrels per day in 2020Q2, and increased to 94 million barrels per day in 2021Q2.
  - Global oil demand is expected to reach pre-pandemic levels "by end of 2022."
  - The Brent oil price surpassed its pre-pandemic level by around "14 percent." OPEC+ decided to boost production and ease production curbs.

### B. The Economic and Financial Outlook in the GCC Countries
- Immediate policy response:
  - GCC combined announced fiscal measures averaged "2.3 percent of GDP" and were complemented by macro-financial support measures (Appendix I).
- 2020 recessions:
  - GCC growth contracted by "4.8 percent in 2020," composed of declines of "5.9 percent in oil GDP" and "3.9 percent in non-oil GDP."
  - Fiscal and external balances moved into deficits of "8.8 percent of GDP" and "0.4 percent of GDP," respectively.
- 2021 recovery and projections:
  - Non-oil GDP in the GCC is expected to grow by "3.8 percent in 2021."
  - Real oil GDP growth is expected to be "0.3 percent in 2021" and "5.3 percent in 2022."
  - Overall real GDP growth for the GCC is projected at "2.5 percent in 2021."
- Cross-country variation in recovery:
  - Saudi Arabia: non-oil GDP projected to grow "4.7 percent in 2021."
  - Bahrain, Kuwait, UAE: non-oil GDP projected "around 3 percent."
  - Oman: non-oil growth projected "1½ percent."
  - Qatar: non-oil growth projected "2 percent."
  - Contact-intensive sectors (wholesale and retail trade, restaurants, hotels, finance and real estate) account for around "34-36 percent of non-oil GDP" in Bahrain, Qatar, and UAE, compared to "26 percent in Saudi Arabia."
- Medium-term outlook and scarring risks:
  - Growth in GCC countries is expected to remain "some 4 percent below pre-pandemic trends throughout the forecast horizon," with significant cross-country variation.
  - Output gaps expected to close only gradually.
- Labor markets:
  - Despite increases in unemployment, labor markets have "weathered the pandemic relatively well."
  - Employment patterns: non-national employment fell during the pandemic and may be rebounding; national employment has held up better or increased.
  - Structural issues persist: fragmented labor markets, large public sectors employing nationals, private sector dominated by expatriates; female labor force participation remains less than half of male participation.
  - Recent reforms: Saudi Arabia, Bahrain, and the UAE passed legislations prohibiting gender-based discrimination in employment; Qatar introduced a minimum wage and abolished the sponsorship system for foreign workers.

### C. Policy Priorities (summarized from executive guidance)
- Public health:
  - Continue vaccination rollout for all residents and maintain contingency health plans for recurrent outbreaks.
- Near-term macroeconomic policy:
  - Keep macroeconomic policies accommodative until recoveries are firmly established.
  - Maintain fiscal support as needed, increasingly targeted to maximize efficiency and contain fiscal burdens.
  - In countries with limited policy space, maintain targeted support while identifying fiscal savings from cutting or reallocating non-priority spending.
  - Extend macro-financial policies to ensure liquidity and spur credit growth, targeted to viable firms and complemented by close monitoring of financial stability risks.
- Medium- and long-term policy direction:
  - Fiscal policy should aim for "growth friendly consolidation" to ensure long-term fiscal and external sustainability.
    - Strengthen fiscal frameworks, further mobilize non-oil revenues, and increase spending efficiency.
    - Avoid procyclical spending when oil prices rise; use windfalls to rebuild policy space.
  - Financial sector:
    - Manage current stress, legacy risks, and emerging vulnerabilities.
    - Strengthen insolvency and resolution frameworks, reinstate some prudential measures eased during the crisis, and step up supervisory efforts.
  - Structural reforms to support sustained growth and diversification:
    - Accelerate reforms to raise female labor force participation, increase flexibility for expatriate workers, improve education quality, further leverage technology, enhance regulatory frameworks, deepen regional integration, and address climate change.

### D. Concluding Remarks
- GCC policymakers acted quickly to mitigate twin shocks; infection rates have declined from peaks and recoveries are underway, but policymakers face a challenging and uncertain landscape due to uneven global recovery and pandemic risks.
- The policy challenge is to balance continued near-term support and health protection with medium- and long-term reforms to rebuild buffers, ensure fiscal and financial sustainability, and accelerate diversification to mitigate risks from declining global oil demand and climate change.

*Prepared by Erik Lundback (Lead), Abdullah AlHassan, Imen Benmohamed, Haytem Troug, Yang Yang, and Dalia Aita under the guidance of Ali Al-Eyd. Editorial support was provided by Esther George.*

### 13.      Overall fiscal balances are expected to improve with higher oil prices. The combination

### 13.      Overall fiscal balances are expected to improve with higher oil prices. The combination

### Fiscal outlook and non-oil balances
- GCC overall fiscal deficit is expected to improve to -1.8 percent of GDP in 2021, reaching balance by 2023.
- Non-oil primary balances:
  - Deteriorated by about 3 percent of non-oil GDP in 2020.
  - Expected to improve to a deficit of around 35 percent of non-oil GDP in 2021.
- Heterogeneity across countries in fiscal reform implementation, with notable progress in Oman and Saudi Arabia.

### Public debt, debt service, and fiscal gaps (Box 3 highlights)
- Average public debt levels increased from 24 percent of GDP in 2015 to 60 percent of GDP in 2021.
- Average debt service burdens rose from about 7 percent of GDP in 2020 to about 10 percent of GDP in 2021.
- Debt increases: debt levels increased by an average of 12.8 percent of GDP from pre-pandemic levels, pushing overall debt levels to approximately 60 percent of GDP, on average, in 2021.
- Foreign reserves declined by an average of 5 percent in 2020 compared to 2019.
- Financing needs:
  - Projected to decline by 5 percent in 2021.
  - Expected to remain 3 percent above their pre-pandemic levels, on average.
- Primary fiscal balances projected to deteriorate from pre-pandemic levels by an average of 2 percent of GDP in 2021.
- Permanent Income Hypothesis (PIH) application:
  - Gap between actual non-oil primary balances and sustainable counterparts estimated at 17 percent of non-oil GDP in 2021.
  - Gap projected to decline to 12 percent over the medium term.
  - Baseline PIH assumptions: 5.5 percent for returns on NFA, population growth of 1 percent, 2.0 percent for the US dollar deflator, and 2.5 percent of real GDP growth.
- Non-oil Debt Sustainability Analysis:
  - Average 30 percent gap between the debt-stabilizing primary non-oil balance and projected medium-term non-oil primary balance as a ratio of non-oil GDP.
  - Gap projected to decline in 2021 by an average of 19 percent from its 2014 level.
- Fiscal breakeven prices exceeded observed oil prices in 2021.

### Financial and monetary developments
- Banking systems remain well-capitalized across the region, with recorded asset quality and profitability deteriorations relatively modest though variable across countries.
- Private sector credit:
  - Credit growth halted in Oman but is expected to improve in 2021.
  - UAE: credit to the private retail segment recovered, corporate lending continues to contract.
  - Saudi Arabia: credit growth remained positive and even accelerated.
- Support measures have maintained credit supply but risk vulnerabilities if unwinding is not carefully timed and managed.
- Inflation:
  - Expected to be contained below 3 percent on average in 2021 (range: Kuwait at 3.2 percent to Bahrain at 1.0 percent).
  - Expected to moderate to 2-2½ percent in 2022.
  - Note: Saudi Arabia’s mid-2020 VAT rate increase caused a jump in inflation that was largely reversed in 2021 as the base effect disappeared.

### External sector developments
- Current accounts improving and expected to be substantially stronger in 2021 and onwards.
- Service exports, particularly tourism (travel credit), remain below pre-pandemic levels for most countries.
- Total external debt levels:
  - Increased by an average of 28.7 percent of GDP in 2021.
  - Projected to decline by an average of 11.9 percent of GDP in 2022.
- International reserves:
  - Improved in 2021 after a decline of 5.8 percent in 2020.
  - Improvements reflect disbursements of SDR allocations, which average 1.5 percent of GDP.

### Risks to the outlook
- Downside risks:
  - Renewed rises in COVID-19 cases and uneven global vaccination progress, risk of new strains.
  - Tightening of global financial conditions could reverse capital flows, drive sovereign spreads higher, and squeeze public financing—especially in economies with limited fiscal buffers and reliance on external financing.
  - Appreciation of the U.S. dollar would undermine competitiveness of GCC non-oil sectors.
- Upside risks:
  - Higher oil prices would support public balance sheets and macroeconomic outlook but could induce pro-cyclical fiscal policies.
- Policy response: Pursuing fiscal and structural reforms would strengthen macro-stability and raise potential growth.

### Climate change impacts and responses (Box 4 highlights)
- Climate stressors and vulnerabilities:
  - Annual average temperature increased by 1.3°C since the turn of the millennium.
  - Precipitation averaged 6.7mm annually (1991–2020) compared to 16 mm for MENAP and 94 mm for the world.
  - Agriculture accounts for about 85 percent of total water consumption in Oman, Saudi Arabia, and UAE.
  - Urbanization accounts for approximately 50-60 percent of total water consumption in Bahrain and Qatar.
  - GCC (except Oman) among the 10 most-water stressed countries.
- Responses and mitigation/adaptation measures:
  - Energy sector targets: 20 percent in 2030 (Oman), 50 percent in 2030 (Saudi Arabia), 40 percent in 2040 (UAE).
  - Water management: dams in Oman and Saudi Arabia; wastewater reduction, recycle, and reuse measures.
  - Agriculture: sustainable practices including vertical and hydroponics; Oman investing in agriculture and fisheries.
  - Land degradation: green belts; Saudi Green Initiative and Middle East Green Initiative aim to plant 50 billion trees.
  - Marine protection: mangrove planting, coral reef restoration; artificial reefs (Bahrain and UAE).
  - Health and early warning systems; mandatory mid-day break for outdoor workers during summer.
  - Urban planning: expansion of metro systems (Saudi Arabia and UAE); green building initiatives.
  - Efficiency: district cooling systems (Qatar and UAE); fuel and water tariff reforms.
  - Carbon capture, utilization, and storage used by BAPCO (Bahrain), Aramco and SABIC (Saudi Arabia), and ADNOC (UAE).
  - Waste management: Qatar recycles construction waste; Saudi National Center for Waste Management (2019); Abu Dhabi Single Use Plastic Policy (2020).
  - Sustainable finance: UAE Guiding Principles in Sustainable Finance; Oman and UAE developing sustainable finance frameworks; Saudi Arabia developing an ESG agenda and plans to issue its first green bond in 2022.
  - International collaboration emphasized in NDCs for technology transfer and technical assistance.
- Transition risks:
  - Oil and gas are main sources of export and fiscal revenue; global mitigation efforts pose serious challenges for oil demand over the medium to long term.
  - Share of hydrocarbon receipts remains about 51 percent of revenues.
  - Structural and fiscal reforms are underway to increase share of other productive sectors and diversify export and fiscal revenues.

### Policy priorities (opening line)
- Near-term priority: fight the pandemic and secure the recovery with increasingly targeted policy support, including to the most vulnerable segments of the population and the economy.

*Sources: National Authorities; and IMF Staff Estimates.*

### 21.      Protecting public health and supporting the most vulnerable remains the top priority.

### 21.      Protecting public health and supporting the most vulnerable remains the top priority.

### Public health and near-term priorities
- Despite rapid progress on vaccinations, GCC countries have seen some spikes in the number of cases in 2021.
- Vaccination rollout for all residents should continue until vaccination targets are achieved.
- Contingency health plans should be in place to respond to any reemerging virus outbreaks.
- Given the highly uncertain environment, policymakers should stand ready to respond to renewed stress from a reemergence of the pandemic or other potential shocks, such as oil price drops and shifts in global financial sentiment.

### Macroeconomic policy stance and withdrawal of support
- Macroeconomic policies should remain accommodative until the recovery is firmly established but be increasingly targeted.
- Future withdrawal of policy support should be carefully calibrated and coordinated.
- Fiscal support to hard-hit sectors and segments of the population has been critical and should be maintained as needed to avoid long-lasting crisis effects and mitigate social impacts; however, policymakers should also limit fiscal burdens, protect policy credibility, and implement increasingly targeted policies to ensure efficiency.
- Where policy space is limited, policy tradeoffs will be more difficult; still, targeted support to hard hit sectors and vulnerable groups should be maintained while identifying fiscal savings from cutting or reallocating non-priority spending.
- Policy communication should be clear that the extended support is temporary and will be withdrawn, in a targeted manner, as the recovery progresses.
- Macro-financial policies to ensure liquidity and spur credit growth should minimize the potential build-up of imbalances and be complemented by close monitoring of financial stability risks.
- Extension of loan moratoria should be data-dependent and complemented by continued intense monitoring of financial stability risks, including forward-looking assessment of banks’ asset quality and credit portfolios to ensure adequate bank buffers.
- Central banks should analyze the use of liquidity lines to gradually target and wind them down once the recovery is well under way.

### Medium- and long-term policy goals
- As the COVID-19 crisis abates, policies should address medium- and long-term challenges: securing fiscal sustainability, ensuring sound yet dynamic financial sectors, and raising potential growth and competitiveness in a more diversified economy.
- Prudent and forward-looking policies would quickly strengthen credibility and position economies to withstand rapid changes in the global environment and risk sentiment.

### Fiscal sustainability and intergenerational considerations
- The crisis has brought forward medium- and long-term fiscal policy challenges to secure fiscal sustainability and meet intergenerational equity needs.
- While the gap between actual non-oil primary balances and those implied by the Permanent Income Hypothesis to ensure intergenerational equity has been declining in recent years it is still substantial (Box 3).
- Gradual and determined consolidation over the medium-term is required; additional efforts may be needed to ensure adequate savings for future generations and to meet increasing challenges posed by climate change and lower demand for oil from the transition away from fossil fuels (Box 4).
- Policymakers should leverage higher oil prices to reduce debt burdens and avoid past patterns of procyclical policies (Figure 14).
- Once the pandemic is under control and the recovery firmly underway, priority should be given to achieving durable and growth-friendly fiscal consolidation that is geared towards economic diversification and inclusive growth, while promoting gender equality and addressing intensifying vulnerabilities from climate change.

### Medium-term fiscal frameworks and public outreach
- Fiscal consolidation should be underpinned by credible medium-term fiscal frameworks (MTFFs) and public outreach.
- A MTFF anchored by a clear medium-term fiscal objective and guided by a binding operational target—for example, based on either expenditure ceiling or a non-oil fiscal balance—and supplemented by well-defined escape clauses in case of large shocks, would help achieve medium-term objectives.
- Further building macro-fiscal capacity in ministries of finance would help implement multi-year budget frameworks.
- Align sovereign wealth funds to fiscal frameworks through inflow and outflow rules to ensure a consistent fiscal anchor.
- Strengthen contingency plans through a fiscal risk analysis framework to respond to future adverse shocks and maintain MTFF credibility.
- Progress on such frameworks (e.g., Oman, Saudi Arabia) is welcome and should continue.
- Clearly communicate the aims and scope of fiscal consolidation, MTFFs and underlying reform measures to strengthen credibility.

### Revenue and expenditure reforms (priority measures)
- Mobilize non-oil revenue by:
  - Introducing or expanding VAT rates,
  - Phasing out tax exemptions,
  - Increasing the efficiency of tax collection, including by harnessing digital solutions,
  - Considering the introduction of corporate and income taxes.
- Recent progress: Saudi Arabia increased the VAT rate in July 2020; Oman introduced the VAT in April 2021.
- Contain the wage bill by proceeding with necessary public wage and employment reforms:
  - Rationalize large public sector wage bills,
  - Gradually reduce the size of the civil service for non-essential services,
  - Increase efficiency through expenditure reform,
  - Reduce large gaps between public and private sector compensation.
- Phase out poorly targeted subsidies, particularly water and energy subsidies, to reduce energy consumption and carbon emissions; use savings partly to strengthen safety nets and boost investment in infrastructure for diversification, climate adaptation (resilience) and mitigation (e.g., alternative energy resources).

### Fiscal transparency and coverage
- Further progress in fiscal transparency is needed.
- Expand fiscal coverage beyond central government operations to reflect a more comprehensive picture of public sector sustainability.
- Improve disclosure and management of fiscal risks and enhance disclosure of fiscal data such as revenue, expenditure, and financing.

### Financial sector stability and policy recommendations
- Ensuring financial stability and a dynamic financial sector is key for a smooth recovery and sustained strong economic growth.
- Financial sectors appear overall sound but current stresses, legacy risks and emerging vulnerabilities need to be managed.
- As policy support is withdrawn, underlying financial vulnerabilities among banks and their clients will likely surface; sectoral winners and losers will become clearer.
- Continued weak profitability paired with increased leverage in corporations and SMEs could be a source of financial instability and weigh on banking systems.
- Prudent management of corporate deleveraging pressures in the post-crisis period could foster a speedier recovery.

### Insolvency, resolution, and bank soundness
- Expedite strengthening of insolvency and resolution frameworks to help banks deal with crisis legacy loans; ensure swift recognition of impairment and resolution of bankrupt borrowers while targeting distressed but viable borrowers.
- Ensure adequate bank buffers to reduce the length and severity of any negative credit cycle.
- Close monitoring of credit standards among SMEs and corporations, paired with intense supervision of banks and other financial institutions, is required:
  - Detailed on- and off-site inspections,
  - Ensure adequacy of credit risk assessments and provisioning,
  - Conduct asset quality reviews and stress-testing.
- Encourage banks to address declining profitability through increased efficiency and lower costs, including harnessing digital solutions and fintech to further expand financial inclusion, especially of women, youth, and SMEs.
- Gradually reinstate prudential measures relaxed in 2020 and work with affected banks on restoring buffers, including restoring pre-pandemic asset classifications where relaxed.
- Consider constraints on dividend distribution, if needed, to ensure banks’ buffers are adequate.
- Address pre-existing vulnerabilities, including reducing loan-to-deposit ratios where they remain above regulatory norms and significant FX mismatches.

### Financial market development and inclusion
- Continue reforms to develop financial markets and the non-bank sector and increase financial inclusion:
  - Develop a yield curve and increase market liquidity through secondary markets trading,
  - Focus stock market reforms on enhancing corporate governance and investor protection,
  - Remove restrictions on foreign ownership,
  - Encourage financial market competition.

### Systemic risk reduction and data gaps
- Address systemic risks from deeper links between public, financial, and real sector balance sheets through credible fiscal adjustment and reform to ensure economic diversification.
- Continue progress in building statistical capacity and closing data gaps, particularly for balance sheet data for the broader public sector, non-bank financial institutions, and the private sector.

### Reviving diversification, competitiveness, and medium-term growth
- Sustained growth, competitiveness, and diversification remain central to avoid lasting negative effects on productive capacity from COVID-19.
- Preserving and enhancing competitiveness is critical for diversification and investment, especially amid a global transition to lower carbon-intensive economies.
- Over the longer-term, move toward environmentally sustainable growth as global demand for hydrocarbons is expected to be lower due to worldwide policies addressing climate change.

### Structural reform priorities to boost productivity and non-oil growth
- Facilitate resource reallocation within and across sectors, including from non-viable firms to viable ones by improving and utilizing bankruptcy frameworks; reduce distortions that favor the public sector in labor and financial markets.
- Encourage labor force participation of nationals, particularly females, by removing explicit and implicit barriers and providing more maternity and childcare support.
- Adopt more flexible policies for expatriates to avoid abrupt declines in labor supply and reduce the wage gap between nationals and expats.
- Improve the quality of education and training to reduce structural mismatches and deliver world-class quality.
- Enhance regulations and governance to mobilize private sector and foreign direct investment in the non-oil sector:
  - Reduce restrictions on foreign ownership,
  - Align tax treatments of local and foreign firms,
  - Reduce preferential treatments for government-related entities,
  - Improve transparency and accountability in the public sector,
  - Strengthen AML/CFT frameworks.
- Promote digitalization to prepare for the future of work and protect macro-financial stability:
  - Regulatory sandboxes in Bahrain and Saudi Arabia support fintech,
  - UAE Data Law adoption supports digitalization by protecting privacy and limiting entities’ use of personal data,
  - Oman established the National Digital Economy Program to create national industries based on the digital economy, speed up digital transformation in the public sector and upgrade electronic services.

### Exchange rate regime
- Pegged exchange rate regimes remain appropriate for GCC economies.
- More flexible exchange rates over time could support development of non-oil tradable sectors, but moving away from the peg would remove a credible monetary anchor—delivering low and stable inflation—with limited near-term competitiveness gains.
- Fiscal consolidation and competitiveness-enhancing structural reforms would foster private-sector-led growth, ensure external sustainability and support the peg.
- Strengthening liquidity management and forecasting frameworks and deepening domestic money and capital markets would help support more active monetary policy frameworks in the future.

*International Monetary Fund — GCC: Economic Prospects and Policy Challenges for the GCC Countries (section 21).*

### 37.      Continued GCC integration will support economic and financial development. The Al-

### Continued GCC integration will support economic and financial development.

### Regional integration and economic prospects
- The Al-Ula Declaration from January this year is expected to boost intra-regional trade, tourism, and financial flows.
- If integration progresses further, longer-term growth gains could be substantial with significant room to enhance intra-GCC trade.
- Closer integration paired with further improvements in the business environment could attract additional FDI inflows to the region.

### Climate change and resilience
- Climate change policies are critical given the region’s dependence on hydrocarbons.
- Actions undertaken include:
  - reforms of the energy sector to increase the share of cleaner energy sources;
  - energy efficiency measures;
  - water management actions to develop new sources of freshwater;
  - policies to fight land degradation;
  - coastal marine management;
  - investment in carbon capture, utilization, and storage.
- Further policy efforts and cooperation are essential, including:
  - managing transition risks by rebuilding financial buffers and diversifying economies and sources of fiscal revenues;
  - protecting impacted vulnerable households and businesses through cash transfers, social safety nets, and retraining workers.
- The recent Saudi Green Initiative is noted as welcome in this context.

### Concluding remarks: near-term and medium-term policy priorities
- Near-term (pandemic stage) priorities:
  - Secure the health of the population and mitigate immediate economic and social effects of the crisis.
  - Macroeconomic policies should remain accommodative until recoveries are firmly established.
  - Where policy space is limited, maintain targeted support while identifying fiscal savings from cutting or reallocating non-priority spending.
  - As the pandemic subsides, manage gradual withdrawal of support and remain flexible for potential recurrent virus outbreaks through health contingency plans.
- Medium-term priorities (once recoveries are firmly established):
  - Secure strong inclusive and green growth, sustainable fiscal positions, and macro-financial stability.
  - Fiscal policy should aim for growth-friendly consolidation to ensure long-term fiscal and external sustainability.
  - Priority actions:
    - strengthen fiscal frameworks;
    - further mobilize non-oil revenues;
    - increase spending efficiency.
  - With higher oil prices, avoid procyclical spending and use windfalls to rebuild policy space.
  - Manage current stress, legacy risks and emerging vulnerabilities in financial sectors to support recovery and structural transformation.
  - Accelerate reforms to drive productivity and diversification to address scarring from COVID-19 and longer-term declining global oil demand.

### Financial and fiscal measures implemented to mitigate the pandemic (selected measures)
- Monetary and financial measures (country highlights):
  - Bahrain:
    - Reduced policy rates: yes.
    - Liquidity support: BD 3.7 billion zero interest repo.
    - Loan payments deferral: For private sector until December 2021.
    - Other: Doubled the SMEs liquidity fund to BD 200 million; reduced cash reserve ratio, LCR and NSFR; relaxed LTV for new residential mortgages; reduced risk weight of loans to SMEs; allowed booking of loan deferral-related losses directly to equity and not to P&L; amended IFRS9 classification for Stage 2 and Stage 3 assets.
  - Kuwait:
    - Reduced policy rates: yes.
    - Loan payments deferral: For citizens’ loans until September 2021.
    - Other: Reduced capital requirements, LCR, and NFSR, relaxed LTV for existing homes and home construction; reduced risk weight of loans to SMEs.
  - Oman:
    - Reduced policy rates: yes.
    - Liquidity support: Repo facility (OMR 1.7 billion) in, FX swap (OMR 1 billion).
    - Loan payments deferral: For individuals and corporates (OMR 1.7 billion); deferrals extended to end-2022 for Omani citizens laid off or with reduced wages, and to end-2021 for Riyada-cardholding SMEs.
    - Concessional financing: Interest-free emergency loans (OMR 19.3 million).
    - Other: Reduced capital conservation buffer (OMR 4.2 billion); increased lending ratio from 87.5 percent to 92.5 percent (OMR 1.5 billion); allowed banks to defer the risk classification of loans related to government project (OMR 1.3 billion); allowed tolerance up to 25 percentage points in LCR and NSFR; relaxed LTV for first time buyers.
  - Qatar:
    - Reduced policy rates: yes.
    - Liquidity support: QR 50 billion zero-interest repo window.
    - Loan payments deferral: For private sector until June 2021.
    - Concessional measures: Capped rates for loans to private sector companies for wages and rental payments until September 2021; QR 5 billion guarantees for loans to private sector companies for wages and rental payments until September 2021.
  - Saudi Arabia:
    - Reduced policy rates: yes.
    - Liquidity support: SAR 50 billion deposits with banks.
    - Loan payments deferral: For affected SMEs until December 2021.
    - Concessional financing: To SMEs until March 2022; National Development Fund financing to the private sector.
    - Other: SAR 66 billion (listed in table under other measures).
  - UAE:
    - Reduced policy rates: yes.
    - Liquidity support: AED 50 billion zero-interest rate collateralized loans to banks.
    - Loan payments deferral: No blanket deferral; deferral is on individual bank basis.
    - Other: Reduced reserve requirements, NSFR, relaxed LTV ratio for first-time buyers and real estate lending cap; reduced risk weight of loans to SMEs; allowed the use of banks’ excess capital buffers.
- Fiscal measures (selected totals and allocations):
  - Bahrain: Total estimated support 6.7 (in LC billions); Allocated to 2020: 0.9 (in LC billions); Allocated to 2021: 0.8 (in LC billions); in % of 2020 GDP: 0.05.
  - Kuwait: Total estimated support 4.9; Allocated to 2020: 1.6; Allocated to 2021: 0.5; in % of 2020 GDP: 1.1.
  - Oman: Total estimated support 0.6; Allocated to 2020: 170.2; Allocated to 2021: 23.8; in % of 2020 GDP: 146.4.
  - Saudi Arabia: Total estimated support 5.5; Allocated to 2020: 143.9; Allocated to 2021: 126.6; in % of 2020 GDP: 17.4.
  - Qatar: Total estimated support 1.0; Allocated to 2020: 5.1; Allocated to 2021: 5.1; in % of 2020 GDP: NA.
  - UAE: Total estimated support 2.8; Allocated to 2020: 32; Allocated to 2021: 31.7; in % of 2020 GDP: 0.3.

### Post-COVID-19 growth challenges and channels of persistent damage
- The COVID-19 crisis is expected to cause persistent damage to potential output in many countries over the medium term.
- WEO chapter findings: deep recessions often lead to long-lasting scars, particularly to productivity.
- WEO forecasts cited: expected medium-term output losses from the pandemic are substantial; output for the world in 2024 expected to be about 4 percent lower than anticipated pre-pandemic.
- Advanced economies projected to return to pre-pandemic trends by 2023 and rise slightly above thereafter due to extraordinary policy support; other countries, including the GCC, expected to remain below pre-pandemic paths throughout the forecast horizon.
- Negative output gaps in the GCC are expected to close only gradually over the medium term.
- Key channels affecting GCC potential output (impacts differ across countries):
  - Oil market: permanent reductions in global oil demand would lower oil output and oil revenues, constraining public investment to support diversification and possibly reducing attractiveness for private investment including FDI; could force countries to lower oil production.
  - Contact-intensive sectors: tourism and hospitality likely to remain weak; important for Dubai, Bahrain, and Saudi Arabia’s diversification plans.
  - Labor market: sectoral shifts could lead to higher unemployment and declining labor force participation; difficulty attracting expatriate labor if uncertainty remains; rising female participation and nationalization in some countries may increase labor supply.
  - Human capital accumulation: school closures interrupt learning, leading to increased dropouts, decreased learning quality, and worsening mental health issues; education losses should be mitigated by GCC well-established infrastructure.
  - Corporate investment: impaired corporate balance sheets and elevated uncertainty could hinder investment, reducing capital accumulation; non-financial corporations entered the pandemic with weaker fundamentals; unprecedented decline in corporate revenue and profitability observed.
  - Total factor productivity (TFP): productivity could be permanently affected by loss of firm-specific know-how, decline in R&D and innovation, and increased resource misallocation; reforms in labor market regulations and business environment could boost TFP; firms and entities that invested in digital capabilities could benefit from digital transformation.
- IMF projections for the GCC:
  - Persistent output losses over the medium term reflect negative output gaps closing only gradually by 2026 and an expected decline in potential output relative to the pre-pandemic trend.
  - Risks vary across GCC countries: Oman, Qatar and Saudi Arabia projected to fare better than many emerging markets; Bahrain, Kuwait and UAE projected to experience somewhat larger output losses.
  - As a region, total GCC output in 2024 is projected to be 4 percent lower than its pre-pandemic projected level in that year.
- Projected contributions to potential non-oil growth:
  - Capital accumulation expected to slow across the GCC as fiscal consolidations begin after the crisis.
  - Employment growth projected to be weaker than pre-pandemic trend due to weaker supply of expatriate workers and lower demand in contact-intensive sectors.
  - TFP growth expected to pick up over the medium term with implementation of business environment reforms, labor market reforms and accelerated digitalization.

### Gender reform and female economic participation
- Progress over the last decade:
  - Female labor participation in the GCC increased by 5 percentage points during the last decade to reach 44 percent on average in 2019, in line with average female participation rate in EMDEs.
  - Improvements driven by Oman, the UAE and Qatar with increases of 9 percent, 8 percent and 5 percent, respectively.
  - Reforms include amendments to labor laws (e.g., Qatar 2004), legislation prohibiting gender-based discrimination in employment (Saudi Arabia and UAE), criminal penalties for sexual harassment (Bahrain and UAE), and UAE introduction in 2020 of paid parental leave for private sector employees.
  - These reforms have been reflected in significant improvement in the Women, Business and Law Index.
- Remaining gaps:
  - Female labor participation remains less than half of male participation and less in managerial positions.
  - Share of women in managerial positions and decision-making bodies is around 16 percent on average; highest in Kuwait at 26 percent and lowest in Saudi Arabia at 10 percent.
- Financial inclusion:
  - About 71 percent of female adults in the GCC had an account at a financial institution in 2017, up from 65 percent in 2014—almost double the average of EMDE rates.
  - Male adults had 86 percent account ownership in 2017.
  - The share of female adults borrowing from financial institutions was around 11 percent in 2017 on average, with 15 percent in Kuwait and UAE.
  - Saudi Arabia’s Housing Program: the Real Estate Development Fund (REDF) provided subsidized mortgage loans to 73,000 women in 2020.
  - Percent of credit card holders among female adults increased to 21 percent in 2017 on average against 17 percent in 2014; gender gap declined from 14 percent to 11 percent.

*International Monetary Fund — GCC: Economic Prospects and Policy Challenges for the GCC Countries (excerpts).*

### 4. GCC countries have undertaken reforms to strengthen civil and social rights and

### 4. GCC countries have undertaken reforms to strengthen civil and social rights and political participation

### Legal and social reforms for women
- Saudi Arabia announced in 2019 several measures to expand women’s role in society, including:
  - increasing their mobility through giving them the right to obtain passports on their own and travel without seeking male guardian permission,
  - enabling them to be heads of households in the same way as men,
  - allowing them to choose a place of residency, with the removal of the obedience provision.
- The UAE announced new reforms in 2019-2020 to enhance women’s social status and ensure their empowerment, including by:
  - guaranteeing equality for passports application;
  - removing the obedience provision and guaranteeing freedom to travel abroad, within the marriage and with respect to parenthood, and their ability to manage assets.
- Both Kuwait and the UAE have recently enacted legislations criminalizing domestic violence and protecting women.

### Political participation of women
- On average, shares increased from:
  - 5 percent and 7 percent in 2010 to 17 percent and 10 percent in 2020, respectively (shares of seats held by women in national parliaments and women in ministerial level positions).
- Country-level shares in 2020:
  - Saudi Arabia: around 20 percent of the seats in the Shoura Council.
  - Qatar: 10 percent.
  - Oman: 2 percent.
  - Bahrain: 19 percent of the National Assembly.
  - UAE: 50 percent.

### Health and education outcomes (gender gap)
- Female adult mortality:
  - declined from 82 per 1000 female adults in 2000 to 51 on average in 2019,
  - lower than the mortality of men which hovers around 73 per male adults in 2019.
- Survival to age 65:
  - women reached 89 percent in 2019, on average,
  - men reached 86 percent.
- Educational attainment (women, GCC averages):
  - share who completed at least primary education increased from 54 percent in 2001 to 84 percent in 2018,
  - share who completed at least undergraduate studies increased from 15 percent in 2001 to 28 percent.
- Drivers cited:
  - broad and significant improvement in the health services in the GCC and equal access to free-of-charge quality healthcare.
  - improvements in educational attainment expected to help women access employment and higher positions.

### Remaining gaps and policy recommendations
- Access to finance and vocational guidance:
  - Better access to finance and closer vocational guidance for women would help develop entrepreneurial skills and enable entry into the job market as employers.
- Political participation:
  - Increasing women participation in political decision-making would help enhance the design of gender-related policies.
- Health services and workforce:
  - More initiatives to reduce the stigma of health issues, particularly with mental health, and increase the number of female medical professionals are crucial for improving women’s health in the GCC.
- Labor rights and asset management:
  - Full rights in terms of working hours, maternity leave and independence in asset management should be ensured across the GCC.

*International Monetary Fund — GCC: Economic Prospects and Policy Challenges for the GCC Countries (excerpt).*

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_Source: https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021072.pdf_