Nawaf Y. Husein
Faculty Member
Msc, CRP , CLBB
Saudi Training Society Member
Institute of Banking
Saudi Arabian Monetary Agency ( SAMA)
P.O.Box : 10820 Riyadh 11443 Saudi Arabia
Tel : + 966 1 463 3000 Ext. 3825
Fax: + 966 1 466 2368
Mobile : + 966 55 48 44 828
SKYPE : abuhejleh2
Dear Readers,
It is now increasingly clear that the global economy has entered another soft spot after its stimulus-fueled recovery in 2009-10. This highlights the limitations of anti-cyclical policies in the face of challenges created by excessive leverage. The problem has been amplified by the effective nationalization of many private losses and the growing debt burdens of governments around the world, something that has pushed fiscal consolidation up the agenda. With the stimulus arsenal of many countries largely exhausted, the global economy looks likely to experience a period of at best anemic growth and risks of major discontinuities.
· The GCC remains a relative bright spot. The growth prospects of the GCC economies have generally improved in the course of the year as a result of substantial new spending commitments on the part of the regional governments. The region looks well positioned to remain fairly insulated from the global turmoil thanks to its macroeconomic stability, healthy financial sectors, and ample government reserves which can be mobilized to support activity.
· Monetary pressures look manageable in the near term. The monetary environment remains largely unchanged with robust deposit growth and a gradual pick-up in bank credit. External drivers of inflation have retreated somewhat as a result of the commodity price correction. Regionally, the housing markets are still subdued, although the outlook is gradually improving. The main challenge is the potentially inflationary effect of increased government spending.
· Entrepreneurship promises to become a major growth driver. As the GCC region redoubles its efforts to foster sustainable job creation and diversification, entrepreneurship is presenting itself as an increasingly pressing priority. SMEs are the main growth and job engine in mature and many emerging economies. While SMEs are numerous in the GCC, they tend to small and focused primarily on low value-added activities, mainly in trading and contracting.
· New policies and institutions are required to unleash the entrepreneurial activity. More needs to be done to effectively match region's large pools of financial and human capital. Survey data consistently points to entrenched challenges in the areas of SME access to finance, accounting, human resources, and business development. Regulatory support to offer and incentivize advice and assistance to SMEs is likely to pay significant dividends.
Best regards,
NCB Economics Department
PO Box 3555, Jeddah 21481
Telephone: +9662646-3232 FAX: +9662644-9783
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