Omani Nominal GDP Up 15 Percent Due to Rising Oil Prices and Production
At current market prices, the Omani GDP rose by 15.3 percent in Q1 2011, mainly as a result of increasing oil output and higher prices. Annual inflation began to slow down in June, based on government statistics.
Oman Investment Fund chief economist, Dr Fabio Scacciavillani, spoke about the GDP figures stating that the increased GDP is a reaction to global oil prices that stayed at higher levels for the first six months of 2011. GDP growth is mostly a result of high prices and greater oil production, according to Scacciavillani.
Output of petroleum in Oman rose 17.8 percent during the first quarter, rising from RO 2.52bn last year to reach RO 2.97bn in 2011. Petroleum made up 48.3 percent of Omani GDP. Non-oil GDP climbed 12.5 percent during the opening quarter, hitting RO 3.1bn.
Inflation slowed down to 4 percent in June, down from May’s figure of 4.4 percent, mainly due to a global softening of commodities prices.
Dr Scacciavillani noted that international commodity prices have stabilized and, in certain cases, even declined. A weak outlook on the global economy impacts global demand, while also helps to stabilize prices.
Scacciavillani commented on a weakened US dollar. When questioned on whether that trend might result in more inflationary pressures for Oman, Scacciavillani noted that this condition is no longer a major issue, with domestic prices now more closely linked to higher food prices across the globe. It is the objective of the central bank to maintain a currency that is pegged to the dollar. As such and according to Scacciavillani, there are few monetary policies available to counter inflation.
Senior economist for HSBC Middle East, Liz Martin predicts that the real GDP in Oman will continue to grow by 3.6 percent this year. GDP growth in the opening quarter has been positive, said Martin, but mainly as a result of rising oil prices and production. With a softening global economy the second portion of the year could present more challenges, although the fiscal policies in Oman are set to support continued growth.
Nominal GDP in Qatar Up By 28.4 Percent
The real GDP in Qatar has expanded by about 16 percent as a result of rising oil prices and greater gas production, based on almost 28.4 percent expansion over the first quarter and according to government figures.
In current prices the GDP has reached almost QR 141.8bn for Q1, up from around QR 110.4bn in the opening quarter of last year, according to the latest brief by the Qatari Statistics Authority.
GDP rose by 12.2 percent since the fourth quarter of last year. The hydrocarbon sector alone climbed almost 44.2 percent to hit QR 81.1bn from last year’s level of QR 56.2bn.
The report stated that these sharp increases resulted from greater production of oil and gas, as well as higher price levels.
A widening in the manufacturing sector saw it reach QR 14.1bn, a 19.7 percent increase. Nominal growth for the transportation sector reached 20.1 percent, while the insurance, business services, real estate and finance sectors experienced around 10.4 percent increases.
Real GDP growth in 2010 was around 16 percent, according to the report. In current prices that increased by 30.1 percent to hit QR 463.49bn.
Qatar is the leading LNG supplier and has reported one of the largest growth rates for GDP around the world, mainly due to a surge in LNG exports.
A recent Arab Monetary Fund report stated that Qatar’s real GDP could climb by almost 20 percent in 2011 due to greater gas exports and an increase in the price of oil.
The Abu Dhabi firm reported that Qatari real GDP growth, which was 16.3 percent in 2010, will rise to 20 percent in 2011 thanks to increased oil prices, LNG export expansion and more infrastructure.
One of the smaller crude oil producers in OPEC, Qatar made an announcement late last year that projects supporting plans to pump almost 77mn tonnes of LNG were complete, making the nation the dominating LNG exporter.
More than $100bn has been invested in the massive North Field, a spread of more than 6,000 square km covering Iranian and Qatari waters that is reported to have reserves of almost 25tr cubic metres.
IMF Reports Favorable Outlook For Saudi Economy
The International Monetary Fund stated that Saudi Arabia should maintain a watch on inflationary pressures after increasing social spending. IMF’s near-term outlook for the Kingdom’s economy is positive.
IMF forecasted Saudi inflation at six percent for 2011, while Paul Gamble of Jadwa Investment noted that their forecast was slightly high.
Gamble noted that average inflation for the opening half of 2011 reached 4.8 percent. He stated that it should not go far beyond six percent by the close of this year.
National Commercial Bank chief economist Jarmo T Kotilaine confirmed that the IMF assessment of the Kingdom’s economy is similar to those of local analysts. Even in the midst of gathering storms, Saudi Arabia remains a global strong point due to desirable macroeconomic fundamentals, resilient global oil markets and growth prospects for the Kingdom, according to Kotilaine.
Kotilaine also noted that most agree inflation is the leading challenge currently. He stated that although government spending has helped the Kingdom remain resilient in the global crisis, modifications are necessary over the long term.
Private sector development and diversification are vital and acceleration towards these goals has supported Saudi growth, according to Kotilaine.
Gamble noted that although the IMF report outlines the key challenges within the Saudi economy, massive foreign reserves built up from higher oil revenue would allow the Kingdom to handle those challenges.
SAMA’s Gov Muhammad Al-Jasser noted that economic growth in Saudi Arabia might hit 6 percent in 2011, higher than initial estimates of 4.3 percent.
IMF forecasted a fiscal surplus of 9.3 percent of GDP for 2011, down from 12.8 back in April. The current account surplus was forecast to reach 20.1 percent of GDP, up from the initial figure of 19.8 percent.Paul Holdsworth, Staff Writer, Gulf Jobs Market News