International Monetary Fund (IMF) Managing Director Kristalina Georgieva addressed the Gulf Cooperation Council (GCC) Ministers of Finance and Central Bank Governors in Kuwait, focusing on the theme “Enhancing GCC Resilience to Global Shocks.”
Georgieva noted that recent global trade tensions had eased due to new agreements and pauses in tariff increases. She stated, "Almost all countries subjected to US tariffs have refrained from retaliating. This, combined with the fact that the rest of trade relations among countries remain guided — so far — by WTO rules, allowed us to avoid a full-scale trade war."
She highlighted the adaptability of the private sector, mentioning its efforts in adjusting supply chains and investment strategies amid uncertainty. As a result, she said global growth prospects have improved since April but remain below pre-pandemic levels.
Georgieva emphasized ongoing risks such as protectionism, possible shocks to labor supply from changing immigration policies, and eroding confidence affecting consumption and investment. She remarked, "In this environment risks to the global outlook remain tilted to the downside."
Growth projections for different regions vary. According to Georgieva, "Growth is expected to accelerate in the Middle East and Central Asia as global headwinds are offset by an increase in oil production, and structural reforms pay off." For GCC economies specifically, she acknowledged their continued strong performance despite declining oil prices and rising geopolitical tensions.
"The impact of higher U.S. tariffs on GCC economies has been modest," she said. She explained that exports from Kuwait to the United States make up only 0.1 percent of total exports, while Bahrain's figure is 8 percent.
Looking ahead, Georgieva projected that overall GCC growth would reach between 3-3.5 percent in 2025 and approach 4 percent in 2026. This outlook is supported by resilient non-hydrocarbon sectors, reversal of voluntary oil production cuts, and increased natural gas output.
However, she warned about potential challenges: "Oil prices and revenues could be negatively affected by weaker oil demand... Additionally, a potential supply glut may emerge as OPEC+ continues to unwind voluntary oil production cuts at a time when demand remains weak." In a scenario where oil prices drop temporarily to $40 per barrel, non-hydrocarbon GDP growth could slow by 1.3 percentage points for GCC countries with fiscal deficits also increasing.
Georgieva identified medium-term risks tied to energy transition efforts, digitalization trends including artificial intelligence adoption, and broader shifts like global fragmentation.
She outlined four key policy priorities for enhancing resilience and accelerating economic diversification within the region but did not specify them during her remarks at this meeting.
Concluding her speech with reference to IMF partnerships in capacity development through regional centers based in Kuwait and Riyadh—supported by contributions from Kuwait and Saudi Arabia—she expressed appreciation for ongoing collaboration: "We look forward to deepening this partnership with the GCC countries...particularly post-conflict countries such as Syria." She also thanked Saudi Arabia’s Minister Al-Jadaan for leadership at the IMFC Chairmanship.
Georgieva ended with an Arabic proverb: "Fī al-ittiḥād quwwa: in unity, there is strength," reiterating her intention for deeper cooperation between IMF and its members.