Arab Gulf growth to slow

DUBAI – ECONOMIC growth of Gulf Arab oil exporters is set to slow to 0.7 per cent this year but will rebound in 2010 to grow by 5.2 per cent on rising oil revenue, the International Monetary Fund said on Sunday.

Saudi Arabia and five of its neighbours in the world’s biggest oil-exporting region are likely to post fiscal surpluses amounting to 5.3 per cent of gross domestic product this year, compared with 27.4 per cent of GDP in 2008, the IMF said. Next year’s surpluses will amount to 10.4 per cent of the region’s GDP.

Real GDP growth in 2009 for the Gulf – including the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain – would fall from an estimated 6.4 per cent last year, Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, said in a statement.

Oil revenues are expected to rise in 2010 with higher prices and the anticipated re-emergence of global demand, the IMF said, allowing Middle East oil exporters – which also include Algeria, Iran, Iraq, Libya, Sudan and Yemen – to rebuild their international reserve positions by over US$100 billion (S$141 billion) in 2010.

Crude prices tumbled from a record peak above US$147 a barrel in July 2008 to just above US$32 a barrel in December, before recovering to trade around US$70 in August.

Many countries in the region are keeping public spending high this year to help their economies weather the global financial crisis. Saudi Arabia, the biggest Arab economy, has committed more than US$400 billion to underpin growth until 2013. — REUTERS