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Poll shows GCC growth expected to slow in 2012
Economic growth in key Gulf Arab states will slow markedly next year because of a sluggish global economy but remain well above recessionary levels.
October 1, 2011 1:26 by Reuters
Gross domestic product in Saudi Arabia, the largest Arab economy and the world’s top oil exporter, is expected to expand 4.5 percent in 2012 after 6.2 percent this year, according to the median forecast of 16 analysts surveyed between September 14 and 27.
The country’s central bank governor reined in his expectations for growth on Wednesday, saying he was “optimistic” that the economy would grow at an annual rate of up to 5 percent this year and next compared to a previous forecast for this year of around 6 percent.
However, analysts in the Reuters poll lifted their forecast for Saudi growth in 2011 by 0.5 percentage point from the last poll taken in June. That was because of the surprising resilience of oil prices this year.
“The real GDP growth figures in 2011 are higher than we thought earlier. But in 2012, because these countries will not increase oil production, you will see the oil sector’s contribution to overall GDP flat,” said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.
Growth in Qatar, although still the strongest Gulf economy, is expected to plunge to 7.7 percent in 2012 from 18.9 percent this year, as the benefits of most of its increase in gas production have already been booked this year. The June poll predicted 7.8 percent growth for 2012.
The UAE, the second largest Arab economy, is likely to grow at 3.8 percent next year instead of the 4.0 percent forecast in the June poll.
“The GCC (Gulf Cooperation Council) economies can easily weather the storm because the price of oil still trades above $80 per barrel, and hence the region’s export accounts are very healthy,” said Farah Ahmed Hersi, senior economist at Masraf Al Rayan in Doha.
However, Bahrain’s growth outlook was slashed for the third time in a…
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