Tuesday, January 17, 2006

Slower GCC economic growth in'06 after '05 boom

The year 2005 was the year of Gulf economies, but according to some analysts there will be a growth slowdown across the GCC this year oil prices will not rise anymore.
  
Indeed, the UAE's gross domestic product (GDP) at current prices is seen to have grown by 17 percent to 443 billion dirhams in 2005 mainly due to the record prices for oil in the international market. The growth compares with the average global growth rate of 4.3 percent forecast by the International Monetary Fund (IMF).

Official figures showed that the GDP of the UAE was AED378.7 billion in 2004 and with the increase in 2005, the country retains its position as the second biggest Arab economy after Saudi Arabia, according to a study made by the Emirates Industrial Bank.

In comparison, Saudi Arabia netted the highest income in OPEC of around $153.3 billion in 2005 and its earnings are expected to climb further to nearly $162 billion this year before slipping to $150.2 billion in 2007.

As for the other GCC members of OPEC, Kuwait's earnings were put at $39 billion in 2005 and nearly $44.1 billion and $41.1 billion in 2006 and 2007 while Qatar's income was estimated at $19.1 billion last year and around $23.3 billion and $23.0 billion in the next two years.

However, according to Richard Agnew from Arabian Gulf, “the region’s economies are officially slowing down.”
According to a forecast from the Department of Economic Development in Dubai after a strong performance in 2005, growth will ease in the main energy producers as oil output and prices plateau. And the slowdown will be most pronounced in the region’s largest economies.    

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