GCC well-positioned to withstand global headwinds: QCB chief
Satyendra Pathak
Doha
Qatar Central Bank Governor Sheikh Bandar bin Mohammed bin Saoud Al Thani delivered a comprehensive and forward-looking assessment of the global and regional financial landscape during the panel discussion on 'Financial Markets: Balancing Risk and Return' held on the first day of Qatar Economic Forum 2025.
His remarks underscored the growing complexity of economic conditions worldwide while highlighting the relative resilience of the Gulf region, particularly Qatar, in navigating these challenges.
The governor began by addressing the broader global economic outlook. He noted that even before the most recent increase in tariff measures, the world economy was already expected to experience a slowdown. This deceleration is being driven by a combination of structural and geopolitical factors, including rising geopolitical tensions, demographic shifts such as the shrinking of the working-age population in many economies, and environmental transformations. These elements, he emphasized, are reshaping the trajectory of global economic growth and demanding more adaptive financial strategies.
He further acknowledged that the recent escalation in the global trade war has added new layers of uncertainty and risk. However, the governor offered a cautiously optimistic perspective, pointing to current data indicating that the risk of an imminent global economic recession remains low. This observation provides some reassurance to markets that, despite mounting tensions, a full-blown contraction may be avoidable in thenear term.
Turning to the financial sector, the governor noted the strengthened position of regulated financial institutions. Over recent years, reforms and tighter oversight have increased their resilience and capacity to manage shocks. However, he expressed concern about the rise of non-bank financial institutions, whose rapid growth and less transparent operations present emerging risks.
These entities, he noted, remain outside the full scope of regulatory frameworks, and their long-term implications for financial stability are still unclear.
Another key point raised was the rising level of public debt across many countries. The Governor warned that this trend could significantly constrain the ability of governments to implement the kind of large-scale fiscal interventions seen during previous crises. As debt burdens grow, the fiscal space for future stimulus becomes increasingly limited, making economic recovery efforts potentially more difficult in the event of renewed downturns.
Focusing on the regional implications, the Governor emphasized that the recent U.S. tariff measures are not expected to have a major direct impact on the Gulf Cooperation Council (GCC) countries, including Qatar.
The United States represents only a small portion of the region's trade, accounting for about 3 to 4 percent of the GCC's total exports and less than 2 percent of Qatar's. As such, the immediate effects of these tariffs on the region's trade performance are likely to be minimal.
Finally, the Governor highlighted the financial strength and policy flexibility of GCC countries as a key advantage. With sound fiscal positions and healthy reserves, these nations are well-equipped to support their economies through potential external pressures. This financial stability, he stressed, will be instrumental in preserving growth and investor confidence in the region.
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