"Measuring inflation in the six GCC countries is a top challenge," Khaled Al-Khater, director of research and monetary policies in the Central Bank, said at the opening of a meeting of the technical committee of the yet-to-be-established monetary union.
The GCC states — Kuwait, Saudi Arabia, Qatar, Bahrain, Oman and the United Arab Emirates (UAE) — have made large strides towards the creation of the monetary union, said Al-Khater.
But he stopped short to say that "there are many challenges which require more efforts to remove them." Inflation is a key factor of the GCC monetary union, he said, and pointed that current economic conditions needed new inflation measurement tools.
Al-Khater said inflation in some countries were high and more than one country was outside the normal average.
Inflation might decline, he said, "but that might take a long time and require wise policies." He called for establishing a standard inflation measurement tool in harmony with the monetary policies.
"The monetary policy should not and cannot react to interim shocks which harm the genuine economy, which vary in their severity and timing from a country to another," said Al-Khater.
He said the technical committee has great challenges ahead.
