Author: Not mentioned
Posted on: Middle East Monitor | November 1st , 2017
The International Monetary Fund (IMF) warned that the continuing diplomatic crisis in the Gulf region could weaken the GCC’s economic growth.
“A protracted rift could slow progress toward greater GCC integration, and cause a broader erosion of confidence, reducing investment and growth and increasing funding costs in Qatar and possibly the rest of the GCC,” the IMF warned in its Regional Economic Outlook.
Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said the economic impact of the crisis remains weak on the GCC, adding that “there were no signs that the diplomatic row has affected economic growth in the region.”
He explained that the Qatari economy continues to adapt to the effects of the diplomatic crisis, but noted that the crisis economic impact has been felt in Qatar by disrupting trade and financial flows.
According to the IMF report, almost a sixth of Doha’s imports are produced in countries that imposed trade restrictions on it and a large portion of other imports pass through Saudi Arabia and the UAE.
The report added that some commercial operations have been diverted through Kuwait and Oman, and alternative sources of food supplies have been found, easing fears of any possible shortfall.
According to the report, when the crisis started, the main concern was that disrupting the trade movement could affect the implementation of major infrastructure projects, but this concern has been reduced by the availability of building materials and alternative sources of imports and competitiveness.
Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic and trade ties with Qatar in early June, accusing it of supporting terrorism, which Doha denies.