By Massoud A. Derhally
Economic growth in the oil producing countries of the Gulf will slow down in 2013, says Moody's
Economic growth in the oil producing countries of the Gulf will slow down in 2013 while net importing countries of the Levant and North Africa region will increase marginally, Moody's Investors Service said.
Assuming the price per barrel of oil at US$112, growth in the GCC will slow down to an aggregate 3.5 percent from 5.7 percent, the rating agency said. GDP growth in non-oil importing MENA countries will be rise to about 2.6 percent in 2013, compared to 2.2 percent the previous year.
"Upheavals in Tunisia, Libya, Egypt, Syria and Yemen have shaken the region's social and political landscape, and conditions remain unsettled to varying degrees in the countries that experienced regime change," Moody's said.
"The ratings of oil-rich GCC countries have been stable since the global financial crisis and throughout the Arab Spring," it added. "Moody's expects GCC governments to continue to record large fiscal and current account surpluses, with the exception of Bahrain which has a fiscal deficit."
Egypt's rating has plunged to B3, or junk status, since early 2011, on par with that of bankrupt Greece. Tunisia where the Arab uprisings were sparked saw its rating fall two notches to Ba1, and Bahrain's rating by one notch to Baa1.
Credit risks "stemming from Dubai's government-related issuers have receded," the agency said, adding the emirate's "economy has bounced back, but its legacy debt remains high and future repayments are large".
Though part of its debt has been paid off or restructured, Dubai still owes about US$110bn.