Growth hopes for UAE, Qatar, and Saudi are down

Growth hopes for UAE, Qatar, and Saudi are down

New poll suggests growth prospects for Gulf economies have worsened this year.

June 18, 2010 7:54 by Rasha Reslan

A new poll from Reuters says the growth prospects for key Gulf states has worsened in 2010, reports Maktoob.com.

Thanks to volatile oil prices and fears for countries with high debt in Europe, credit growth is expected to stay low, putting the brakes on global recovery.

Most of the economies in question are set to grow in low single digit figures, although Qatar is still expected to set the pace with double digit growth.

“The world’s biggest liquefied natural gas (LNG) exporter will book a real GDP growth of 16.1 percent in 2010 on gas output rise and government spending, according to the median forecast of economists polled between June 10 and 17,” says the article.

“Volatility and uncertainty globally and oil prices, which have fallen to $63 a barrel in a matter of weeks, were important factors,” said John Sfakianakis, chief economist at Banque Saudi Fransi Credit Agricole in Riyadh. “Now, they have recovered but the sentiment is increasingly volatile. The private sector is quite cautious in its outlook given the uncertainty in Europe and international banks continue to be highly risk averse.”

The poll sees the UAE growing 2.1 percent this year. Saudi is seen growing 3.7 percent. It predicts Kuwait will grow 3 percent, Oman 4 percent, and Bahrain 3.1 percent.