By Damian Reilly
Oil prices a boon for Gulf growth, expansionary budgets on the cards says Rami Sidani
outlook for GCC economies in the coming year is a rosy one, provided stability
across global financial markets is maintained, Schroders head of MENA
investments Rami Sidani has said.
who runs an investment fund worth some $300m, told Arabian Business: “The
performance of our regional markets will continue to be affected by what is
happening on the global scene, so any deterioration on the sovereign risk in
Europe, or any slowdown in the US, will definitely have an impact on the
sentiment that will prevail in 2011 over our markets.
we continue to see stabilisation, I think everything is pointing towards a very
said that high oil prices would encourage regional governments to spend money
on infrastructure projects, which would stimulate the private sector.
prices are flirting with the $90 level, which is extremely positive for the
region. Oil prices are set at $50 in the GCC budgets, so we are operating at a
substantial buffer from the breakeven point. That means regional governments
will be encouraged to adopt more expansionary budgets going into next year, and
maybe even overspend, above what is planned, as long as oil prices remain at
such high levels. Governments will be encouraged to proceed with their planned
mega infrastructure projects,” he said.
victorious bid to host the World Cup in 2022 would also provide a fillip for
GCC economies in the coming year, he added.
is clearly very positive. We are talking about massive government spending that
will take place in the next ten years in Qatar. $60-70bn is expected to be
spent by the government to get ready for this event. Local as well as regional
companies – contracting, real estate, banks –will all benefit,” he said.