IMF Says UAE Economy on Track For Growth
After weathering an economic slowdown the UAE is on track for 3.5 percent growth in 2011, according to recent statements by the IMF. Both oil and non oil industries will drive growth.
The International Money Fund in Washington, has a bullish view on the UAE economy for the coming period, stating that a majority of economic sectors indicate growth is imminent. Masood Ahmed, director for the Middle East & Central Asian department at the IMF, spoke to Khaleej Times noting that effects of the worldwide slowdown are likely to be a result of the global connections in the UAE.
Ahmed released the Regional Economic Outlook for his department while in Dubai, stating that nearly three percent growth will be seen this year. All indications point to stronger growth for next year.
A healthy and vibrant banking sector and high capital adequacy will help. Credit growth remains slow, but is picking up. There is a risk of the global slowdown causing negative effects, but Ahmed noted that the UAE should be prepared for that impact.
The IMF stated that growth in the GCC would reach seven percent this year, with the current account surplus (external) hitting $279 billion, a 71 percent increase from the 2010 balance of $163 billion.
All non-oil exporting economies in the MENA region will be faced with major headwinds throughout 2012 as unrest around the region and possible global economic slumps darken the horizon.
The higher amounts of public spending in oil exporting nations will be taken care of by the oil output and price levels currently forecasted. Expansion in oil exporters is expected to reach 4.9 percent this year and 3.9 percent next year. Economic growth for the whole region is forecasted to hit 3.9 percent his year and 3.7 percent next year, according to the IMF.
Report Predicts $305 Billion Gain in the GCC This Year
Surging oil prices, which averaged at about $109 per barrel, are set to add $305 billion to GCC oil producing economies this year. This will push the current account surplus to a record high.
The IIF (or Institute for International Finance) projected that most of the GDP increases in GCC nations will be found in the hydrocarbon sector, resulting from higher production and rising prices.
The combined GDP for the GCC states will reach almost $1,380 billion this year, up from $1,075 billion last year. This sets a new record high, above the previous high of $1,138 billion recorded in 2008.
Production of crude within the six member states, including Kuwait, the UAE and Saudi Arabia, is forecasted to increase by around 1.2 million bpd (barrels per day), surging from 15.2 million bpd last year to 16.4 million bpd this year.
Details in a breakdown indicated that the oil sector in the GCC would reach $738 billion in 2011, up from $494 billion last year. The non oil sector will also report an increase, growing from $581 billion to $642 billion.
Forecasts put real GDP growth at 6.7 percent, with a 4.2 percent rise in the non hydrocarbon sector and 10.8 percent growth in the oil sector. The IIF expects to see private sector growth of 3.7 percent and public sector growth of 5.3 percent.
The forecasted oil price is down slightly, averaging $97 per barrel. This decrease will be offset by a 400,000 bpd increase in the region’s crude output. This production rise will maintain a nominal GDP of $1,378 billion next year, only $2 billion below 2011 expectations.
Estimates state that gas production in the GCC saw growth of 5.4bn cubic metres per day last year, 6.3bn cubic metres per day this year and is expected to hit 6.6bn cubic metres per day next year. Qatar is set to pump 2.5bn cubic metres per day over the course of 2011 and 2012.
Foreign assets controlled by the GCC sit at $1,513 billion currently. They are forecasted to climb to $1,708 billion this year and reach $1,869 billion next year.
Alpen Capital Says Retail Industry in GCC Set For Vibrant Growth
The compound annual growth rate of retail sales in supermarkets and hypermarkets of the GCC is expected to be 10.7 percent from 2010 to 2015. This rate will outpace growth in the retail industry as a whole.
The report by Alpen Capital looks at the existing size and status of the retail industry, scope for future growth and important market dynamics. There are also individual profiles of each GCC member state, outlining specifics like macroeconomic attributes, recent developments in industry and the driving forces behind retail growth.
Alpen Capital’s managing director, Sameena Ahmad, stated that the retail sector is second largest next to oil in the GCC region and has continued to be one of the fastest growing economic sectors in the area. Various private-held, driven and innovative companies dominate the industry, bent on transforming the region’s retail landscape. These businesses have been resilient in crisis and are set for healthy growth in the near future, according to Ahmad.
Another managing director at Alpen Capital, Mahboob Murshed, stated that despite slowdowns as a result of the worldwide financial crisis, the retail industry in the GCC remains on the growth track. Support has come from increasing affluence, greater disposable incomes, increased tourism and an expanding expat population, as well as massive development in infrastructure.
The area must continue to develop shopping malls in the form of entertainment centers, including many attractions and drawing the populace. Increased competition in the retail industry could present challenges and a continued shortage of qualified labor haunts the sector.Paul Holdsworth, Staff Writer, Gulf Jobs Market News