By Staff writer
Qatar leads Gulf GDP growth; UAE to rebound by 2.4% after 2009 contraction
GDP growth across the Middle East and North Africa region is forecast to reach 4.1 percent in 2010, fuelled by a rebound in oil prices, the International Monetary Fund has said.
The agency in its World Economic Outlook predicted an economic expansion of 5.1 percent in 2011, up from just 2.0 percent in 2009.
"The strength of the recent economic recovery in the MENA region is largely underpinned by the rebound in oil prices from their trough in 2009, which has boosted receipts for oil exporters in the region" the IMF said.
MENA comprises oil exporters Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates and Yemen, and oil importers Egypt, Djibouti, Jordan, Lebanon, Mauritania, Morocco, Syria and Tunisia.
These economies also benefited from a "sizeable and rapid fiscal policy response, especially in oil-exporting economies," which had spillover effects on the region's non-oil exporters "due to close trade links between these groups of economies."
Oil exporters are expected to see a 3.8 percent growth in 2010 and 5.0 percent in 2011, the report said. Oil futures are currently near $83 per barrel, after plummeting to around $30 in early 2009.
The report warned, however, that MENA economics remain exposed to any drop in oil prices and to ongoing economic storms in Europe.
"The economic outlook in the region is closely linked to global developments, primarily through the impact of global economic activity on oil prices. The impact is not confined to the MENA exporters," the IMF said
"The possibility of heightened economic turbulence in Europe poses a significant downside risk for oil importers in the MENA region. Europe is their largest trading partner, accounting for about half of their total exports," it added.
Future increases in oil prices are expected to be "modest," it said.
"Expansion in demand (for oil) by rapidly growing emerging markets is expected to be offset by stagnant demand from advanced economies.”
Among the Gulf players, gas-rich Qatar is expected to top the league with 16.0 percent and 18.6 percent GDP growth projected for 2010 and 2011, compared to 8.6 percent in 2009.
Growth in Saudi Arabia is forecast to bounce to 3.4 percent in 2010, and 4.5 percent next year, from a modest 0.6 percent in 2009.
Meanwhile, the UAE's economy should rebound by 2.4 percent this year, and expand by 3.2 percent in 2011, after contracting by 2.5 percent last year, the IMF said.
A number of non oil-exporting countries are also expected to fare well, the IMF said. Egypt will maintain robust growth at 5.0 percent this year and 5.2 percent next year after registering 4.6 percent last year.
The IMF said net capital inflows into Egypt have turned positive since the second half of 2009, after experiencing a boom-bust cycle.
Lebanon, whose public debt reached $51bn, or 156 percent of GDP by the end of 2009, is expected to maintain the best-performer rank among MENA's non-oil exporters.
The forecast is for 8.0 percent GDP growth in 2010, compared to 9.0 percent in 2009, during which the small country bucked the global recession, thanks to strong capital inflows.
The country's growth rate is expected to drop to 5.0 percent in 2011.