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The Gulf will bounce back
A report by the International Monetary Fund says that compared to other nations, Gulf countries will fare better in – and recover faster from – the recession.
May 26, 2009 2:59 by Parinaaz Navdar
Countries in the Gulf are expected to recover from the financial crisis sooner than other nations in the world, because the price of oil has stabilized at over $50 a barrel, according to Bloomberg. Countries like Saudi Arabia, Qatar and the UAE have been attracting foreign investments again, while their own stock markets have also improved, prompting them to start investing as well.
The stock market recovery has been led by Saudi Arabia’s Tadawul All Share Index, which finished last week with a 26 percent gain for the year to date, after falling 56.5 percent in 2008. Shares for Dubai companies rose on May 24, with Emaar Properties’ shares increasing by 8.02 percent. Dubai Financial Market’s index was also up by 2.82 percent. Most Gulf bourses have risen, thanks to the stability of the increased oil price.
Crude oil traded at $61.6 a barrel on May 24, with prices expected to remain above $50 a barrel for the rest of 2009, and top $60 next year, according to a survey by Bloomberg. “The expected resilience of oil prices puts the Gulf countries in a relatively privileged position compared to Europe and the US,” Eckart Woertz, an economist at the Gulf Research Center in Dubai, told them. “In 2010, that is likely to lead to some resumption of growth, unlike in developed-market economies.”
The Gulf’s dependence on oil is a “strength, not a weakness” that generates surpluses in the long term, Simon Williams, chief regional economist at HSBC Holdings in Dubai, told Bloomberg.
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