Friday 20/11/2009Dollar peg has served Gulf states well, says IMF's Lipsky
Gulf states’ dollar peg has served the region well and inflationary pressures haven’t returned, John Lipsky, the International Monetary Fund’s first deputy managing director, said.
“We do not see at this moment a resurgence of inflationary pressures,” he said in an interview at the World Economic Forum in Dubai. “In recent times, and for the time being, the dollar peg has served the region well.”
Inflation rates in Gulf Arab states have been falling from record highs as oil prices plummeted from a July peak last year of $147.27 a barrel and the dollar strengthened, making imports cheaper for countries with dollar pegs, such as Saudi Arabia, Qatar, the UAE, Oman and Bahrain.
Inflation in Saudi Arabia, the largest Arab economy, eased to 3.5% in October, its slowest pace since June 2007.
Lipsky said the increase in oil prices from December lows “is going to produce a rebound in the surpluses, external surpluses of this region that’s going to be a new challenge.”
The global economy is heading toward a sustained recovery but given the risks of another downturn it is too soon to withdraw stimulus, Lipsky said.
“We think that we are on a trajectory towards sustained growth but that the recovery is going to be relatively moderate and relatively sluggish,” he said in an interview on the sidelines of the World Economic Forum in Dubai.
Gulf states’ dollar peg has served the region well and inflationary pressures haven’t returned, John Lipsky, the International Monetary Fund’s first deputy managing director, said.
“We do not see at this moment a resurgence of inflationary pressures,” he said in an interview at the World Economic Forum in Dubai. “In recent times, and for the time being, the dollar peg has served the region well.”
Inflation rates in Gulf Arab states have been falling from record highs as oil prices plummeted from a July peak last year of $147.27 a barrel and the dollar strengthened, making imports cheaper for countries with dollar pegs, such as Saudi Arabia, Qatar, the UAE, Oman and Bahrain.
Inflation in Saudi Arabia, the largest Arab economy, eased to 3.5% in October, its slowest pace since June 2007.
Lipsky said the increase in oil prices from December lows “is going to produce a rebound in the surpluses, external surpluses of this region that’s going to be a new challenge.”
The global economy is heading toward a sustained recovery but given the risks of another downturn it is too soon to withdraw stimulus, Lipsky said.
“We think that we are on a trajectory towards sustained growth but that the recovery is going to be relatively moderate and relatively sluggish,” he said in an interview on the sidelines of the World Economic Forum in Dubai.
