Gain is backed by rising oil prices and increased production by the GCC members.
Higher oil prices combined with increased crude output helped to push the collective nominal GDP of the GCC states up by almost $133 billion this year and a report by a leading Western institute forecasts that figure will continue to rise in 2011.
Recorded at about $877 billion last year, the GCC’s nominal GDP is expected to hit $1,010 billion this year, according to a quarterly report by the IIF (Institute of International Finance) out of Washington.
Forecasts indicate that 2011 will see another gain of $81 billion, pushing the GDP to record highs even above the 2008 figure of $1076 billion. At that time all six members of the group had pumped massive quantities of oil and the price of crude hit its highest level ever at almost $95 per barrel.
Further breakdowns in the report indicated that all six member states will experience GDP expansions this year. Saudi Arabia, the Arab world’s largest economy, will rise to about $440 billion this year from the $373 billion recorded last year. Saudi is expected to experience a new nominal high of $472 billion in 2011.
The next largest economy in the Arab world is the UAE. That state is expected to record $250.9 billion in GDP for this year and $267.8 billion for next year, up from $230.2 billion seen in 2009.
The IIF report forecasts that the economy of Kuwait will climb from $109.5 billion recorded in 2009 to $124.8 billion this year and a new high of almost $134.8 billion in 2011.
The economy of Qatar relies heavily on the oil and gas industry and is forecasted to rise from $98.3 billion in 2009 to $117.2 billion in 2010 and up to $133.6 billion in 2011. For the first time, these figures will see Qatar’s GDP reach the same levels as Kuwait.
The nominal GDP in Oman is expected to reach $53.5 billion in 2010 and rise to $58.1 billion next year, up from the $46.1 billion seen last year. Even the smallest economic center in the GCC is forecasted to grow – Bahrain’s GDP should rise from $21 billion in 2009 to $23 billion this year and $24 billion in 2011.
IIF’s report indicated that the GCC’s nominal GDP increases are mainly due to the oil sector as higher production and price levels are expected for this year and will continue into next, thanks to a rebound in demand following economic recoveries seen around the globe.
The oil sector in Saudi Arabia is expected to reach $227 billion this year, up from $179 billion seen last year. In 2011 that sector should hit $238 billion.
The hydrocarbon economic sector in the UAE should rise to $73.3 billion this year and $78.4 billion next year, up from $55.1 billion seen in 2009.
In Qatar the hydrocarbon industry is forecasted to swell greatly, reaching $71 billion next year and $61 billion this year, impressive gains from the $45.4 billion seen in 2009. The liquid natural gas exports for the nation are forecasted to surpass 77 million tones next year, allowing Qatar to retain the title of the largest LNG exporter in the world, as well as retaining the third largest natural gas reserves on the planet. IIF’s report also indicated that the oil and gas industries in other member states will experience expansion.
Most of these improvements will be a result of rising oil prices, up from the $62 per barrel seen in 2009 to a forecasted price of $79 per barrel for this year and next. The collective crude output for the GCC is also forecasted to rise, reaching 14.7 million barrels per day this year, up from 14.4 million bpd seen last year. The IIF expects that output to reach 15 million barrels per day in 2011.
Real GDP is expected to sit at a 4 percent increase in the combined economies of the GCC region for this year, according to the IIF.
Expect a four percent expansion for 2010 and a 4.6 percent rise in the real GDP for next year, according to the IIF report. These figures were supported by several different factors, including the rising production and prices of oil as well as fiscal policies in the GCC states that contribute to economic expansion after the worldwide financial crisis of 2008.
As global trade and the flow of capital have been brought to normal levels in the GCC, these conditions have produced opportunities for growth in the global petrochemical industry, especially from Saudi Arabia’s perspective, in the airline and port shipping activities of the UAE and many other services across the region.Paul Holdsworth, Staff Writer, Gulf Jobs Market News