Policy Brief - Toward Frontier Macroeconomic Institutions in Support of Green-Energy Transition

• The international evidence suggests that GCC countries, in order to manage successfully their green transition, will require more real-exchange flexibility and a more advanced framework of monetary and fiscal institutions and rules, in order to ensure macroeconomic stability and to deal more effectively with foreign and domestic shocks. [...] To manage successfully this and regulations that set fiscal institutions and budget transition will require more real-exchange flexibility management procedures and fiscal policy transparency and a more advanced framework of macro institutions and communications. [...] A world-frontier macroeconomic framework Exchange-rate regime and policy Monetary regime and policy Fiscal regime and policy Currency conversion law and central bank / ministry of finance authority in Fiscal responsibility law and other laws Legal Institution ER management Central bank independence law on budget policy and procedures Floating exchange rate (with interven- Regime tions) Inflation t. [...] In addition, nominal and real shocks that affect the Sustainable and successful management of fiscal anchor currency lead to undesirable changes of the policy requires putting in place a comprehensive real ER and hence in international competitiveness. [...] Institutional components of a comprehensive fiscal framework Components Description Fiscal responsability law Transparency and accountability in budget objectives, instruments, planning, and execution Financial management of the budget Legal and administrative powers of the Minister of Finance for efficient budget management Period over which the budget is planned and executed to ensure transparen.