13/02/2018 05:59 AST

International Monetary Fund (IMF) Managing Director Christine Lagarde said yesterday the steady growth in Qatar’s non-oil economy is a reflection of the country’s good diversification policy. Qatar’s growth in the non-oil sector is pretty much on a par with the non-oil growth in the oil importing countries, the IMF Chief said.

Lagarde was attending a roundtable discussion on “Strategic Outlook: Qatar in its New Era”, at Qatar University.

The recent increase in oil prices should not be a case for slowdown on the ongoing reforms in the oil exporting countries. It seems it will not be the case in Qatar. “I spoke to His Highness the Emir and he explained to me the focus diversification and determination on reforms will continue”, she said, adding that Qatar is an important partner of International Monetary Fund.

Sharing her thoughts on the outcomes of her ongoing meetings in the region, the IMF Chief stressed the regional economies to look beyond their ongoing economic diversification to make the economies sustainable. The region needs to invent a new economic model. “Economic diversification is absolutely needed….in order not to depend on a single source of supply or one destination or one mechanism. But it is also about changing the balance between public and private sector.” She said the ‘generous’ subsidies paid over the time as part of social contract is not justifiable for several reasons, including the fiscal drain on the economy.

Giving an overview of global economy, Lagarde said the global economy is currently in a ‘sweet spot’. “We are in the sweet spot because from a 3.2 percent growth rate in 2016, we are in a 3.7 percent growth rate. Our (IMF’s) forecast for 2018-19 is 3.9 percent,” she said.

But it doesn’t mean the growth is coming from all economies exactly in a same way. The countries that have taken strong policy decision all over the world are finely putting their economies in better position. They are creating value and jobs. There is strong stability in these economies, but growth is on the decline in some countries.

“Despite these positive tailwinds, the economic recovery in Mena is projected to be generally subdued at around 3.5 percent. In the Gulf region, growth is expected to recover to 1.8 percent this year after declining slightly in 2017 due to cuts in oil production,” Lagarde added.

On the global economic and financial risks, Lagarde said in 2018 short term risks are pretty neutral but in medium term, IMF strongly believes there are downside risks. Uncertainty in commodity prices and tightening of global financial conditions are the twin downside risks. “Irrespective of market trepidation and volatility we believe that tightening will necessarily come in. “Growth is picking up and wages are going up and inflation is moving up, justifying the reason for financial tightening,” she said.

In his opening remarks, QU President Dr Hassan Al Derham noted Qatar University has developed a new strategy aiming at enhancing its academic programmes and research, and to boosting its efforts to support the development of the local economy. Qatar has developed many strategies to support the research field. These include the establishment of Qatar National Research Fund and Qatar Science and Technology Park, and the launch of a new vision for Qatar Development Bank. These efforts play a crucial role in diversifying the economy and making it sustainable, while building a culture of entrepreneurship in the country.

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