Middle East economies are set to beat previous forecasts for 2012 with GDP growth of 3.8 percent, the Institute of Chartered Accountants in England & Wales (ICAEW) has said in a new report.
The ICAEW also said in its latest quarterly report that it saw 3.3 percent growth next year.
The report, produced by ICAEW's economics partner Cebr (Centre for Economic and Business Research), said earlier forecasts for Middle East economies were conservative as a result of the volatility in the Eurozone and slowing global economic activity at the end of 2011.
"While uncertainty in the Eurozone remains, money printing by Western central banks has contributed to higher oil prices than previously expected, providing a fillip to the Middle East," it said.
The report also said the UAE's property sector, which has seen major declines since 2009, had been "more resilient than many expected with deal flows strong in Q1 of 2012 and prices rising".
It added that recently proposed legislation limiting advance selling was likely to help stabilise investor confidence moving forward.
The ICAEW said growth in the Middle East is expected to be significantly higher than the global average and could approach the growth rates expected for emerging markets this year.
However, the report suggests that growth will cool in 2013 as China and India's demand for energy cools.
Amanda Line, regional director, ICAEW Middle East, said: "The prospects for the Middle East have improved dramatically since the beginning of the year, partly thanks to higher oil prices.
"This has had a positive impact on trade, as demonstrated by the fact that Middle East trade volumes are growing robustly year-on-year. However, with the region's economy significantly affected by emerging markets' thirst for oil any reduction in energy demand from big customers like China and India could lead to a cooling off in growth.
"This means it is still very important to press on with building a diversified economy across MENA that will reduce reliance on oil alone."
Last month, the International Monetary Fund said that economic growth in the Middle East and North Africa will accelerate to 4.2 percent this year from 3.5 percent in 2011.
The economies of oil importers will expand by 2.2 percent and crude exporters by 4.8 percent, the Washington-based IMF said in its World Economic Outlook report.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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