Last Updated: Wed Nov 03, 2010 13:02 pm (KSA) 10:02 am (GMT)

Gulf economy to grow 6.2 pct in 2010: report

The global credit crunch brought a boom in Gulf Arab economies to a grinding halt this year (File)
The global credit crunch brought a boom in Gulf Arab economies to a grinding halt this year (File)

The recovery in oil prices is set to accelerate Gulf Arab economic growth to as much as 6.2 percent in 2010 compared to a projected contraction of 0.9 percent in 2009, a research report said on Thursday.

"We forecast positive real and nominal GDP growth in 2010 as a result of both higher oil prices and production levels," EFG Hermes said in the report.

 We forecast positive real and nominal GDP growth in 2010 as a result of both higher oil prices and production levels 
EFG Hermes

The global credit crunch brought a boom in Gulf Arab economies to a grinding halt this year but high state spending and a turnaround in oil prices are helping the world's top oil exporting region recover.

EFG Hermes projects oil prices to average $62 a barrel in 2009 and $80 a barrel in 2010.

"The overall GCC real GDP growth will be particularly boosted by Qatari real GDP growth, which will accelerate with the marked increase in gas production and, to a lesser extent, Saudi Arabia," the report said.

On Wednesday, Turker Hamzaoglu, emerging markets economist at Bank of America Merrill Lynch, said he expects oil prices to average $82 a barrel in 2010.

"If we expect global recovery to strengthen in 2010, and fiscal stimulus not to be withdrawn, then we have a strong case to be bullish about commodities outlook," he added.

Bank of America Merrill Lynch forecast the Gulf Arab region's GDP to grow by 3.2 in 2010 up from 0.3 percent in 2009.

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