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Arab Economies Emerge Winners, Despite 50% Decrease in GDP: 2008 vs 2009

Middle East : 13 July 2010

The Inter-Arab Investment Guarantee Corporation (IAIGC)’s recent report showed that despite a dramatic 50% decrease in GDP from 5.09% in 2008 to 2.42% last year, Arab economies were in fact the real winners as compared to the rest of the World.

The report noted that the wider Arab regions economy was “adversely affected by the global downturn” but conceded that the relative growth in GDP was “considered good” in comparision to the rest of the world, given the global economy achieved a negative growth of 0.6 per cent in 2009, a dismal performance only trumped by the industrial countries who’s combined GDP reached levels not seen since the 1930’s – contracting by 3.16 per cent.

Conversely, Qatar, which was almost completely cushioned from the global downturn recorded a GDP increase of over 9% in 2009 – bolstered by its enviable position as the owner of around 80% of the world’s natural gas.

Large, expensive long term projects and Government fiscal stimuli will underpin a 4.5% rebound in Arab GDP in 2010, as predicted by both the IMF and the World Bank.

The report estimates that half of the $768 billion worth of projects are planned within the GCC, with Saudi Arabia injecting almost $170 billion into energy, water and electricity projects by 2016 and Qatar pumping $140 billion in the next 10 years into energy, infrastructure and real estate.

Kuwait, similarly plans to invest circa $104 billion and the UAE around $64 billion.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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