“Cooling Down Overheated Economies, Booz & Company Reports”
In an article in the February 4, 2009 issue of AME Info (UAE), Booz & Company Partner Rabih Abouchakra (Middle East) said Gulf Cooperation Council (GCC) nations that have taken steps to manage inflation should be significantly better off in the current economic downturn. “Countries that choose a sustainable development growth model, and who thereby manage inflation and overall macroeconomic stability typically have an easier time sustaining real GDP growth and can recover far more quickly from contractions,” he said. Abouchakra’s comments support a Booz & Company study that examined the root causes of inflation and proposes a holistic approach to GCC policy making—a particular challenge for hydrocarbon-rich economies. Among the biggest inflation jumps have been in the GCC countries of Saudi Arabia, Oman, and the UAE where fast-growing populations, high-wage growth, limited housing, and relatively immature financial systems are common and their inflation rates are highly correlated.