Current account surpluses get wider thanks to higher oil prices.
In 2010 the combined economy of the six oil-producing members of the GCC experienced growth of 4.5 percent. Results for this year should be around 5.9 percent due to the high price of oil, according to a report on the region.
Surging earnings from oil exports will also push the GCC’s combined current account surplus wider, as it should go from 4.0 percent last year to 6.9 percent of the GDP in 2011. The FGCCI, the chamber of commerce and industry in the GCC federation, included these figures in a recent report.
Sent to local media Emirates 24/7 this week, the report by the FGCCI out of Dammam stated that this result would leave the GCC nations with additional funds for use as a stimulus of private industry demand.
The report added that while inflation remains low the monetary policy in the GCC would still face the challenge of how best to encourage growth in domestic credit while avoiding the creation of undue pressures on inflation. The GCC member nations also need to focus on the development of new and sustainable sources of economic growth.
IMF estimates were sited in the report, which said that the oil production in the GCC would climb from about 15.1 million bpd (or barrels per day) last year to 15.7 million barrels per day this year. It was said that this rise would occur along with a swell in the average price of oil, as evidenced by the recent steep increase due to the conflict in Libya, a member of OPEC. Oil prices recently reached almost $120 per barrel.
Over the midterm, much of the increase in oil production will derive from GCC member states. The report noted that the kingdom of Saudi Arabia has plans to increase their capacity for crude output from about 12.5 million barrels per day last year to around 15 million bpd next year (2012). The gas output in the GCC should also increase from the equivalent of 4.3 million bpd back in 2008 to 6.3 million bpd this year.