IMF revises growth forecast upwards for Mideast

The International Monetary Fund has revised its Middle East growth forecast upwards for 2010 and 2011, despite seeing GDP growth in the UAE as flat this year.

In its latest World Economic Outlook Update, the IMF said it sees the region's economies expanding by 4.5 percent this year and by 4.8 percent next year as it continues to recover from the downturn in 2009 which saw growth stifled to just above two percent.

The latest forecast is 0.3 and 0.2 percent higher than previous IMF predictions made last year.

The IMF’s baseline petroleum price projection was unchanged for 2010 and revised up by a small amount in 2011 (to $82 a barrel, from $79 a barrel in the October 2009 Outlook).

On Tuesday, Masood Ahmed, director for Middle East and Asia, International Monetary Fund, said: "In 2010, we expect that overall GDP growth will be about flat. Within that, we expect some continued contraction in Dubai and positive growth in Abu Dhabi.".

On Tuesday, a Reuters poll of 10 analysts said most Gulf Arab states would enjoy higher growth rates this year than previously expected, helped by global recovery, but debt woes in the UAE would weigh on the outlook.

Qatar will remain the region's leader with a 16.1 percent jump in gross domestic product this year thanks to massive expansion of its natural gas facilities, according to the median forecast of economists polled between January 14-25.

Also on Tuesday, Emirates NBD said GCC economies were set to see an average growth of between 3-4 percent in 2010 compared to last year.

The bank predicted real GDP growth during this year of 2.5 percent for the UAE, 3.0 percent for Saudi Arabia, 1.5 percent for Kuwait, 3.0 percent for Oman, 2.5 percent for Bahrain, and 10 percent for Qatar.

By comparison, Emirates NBD said that more traditional markets would stagnate, with GDP growth for the Eurozone predicted at 1 percent, for the UK at 0.5 percent and Japan at 1 percent.