Robust growth f'cast for the Gulf

The oil-rich Gulf monarchies are to show another year of robust growth in 2006, despite a painful correction in the stock markets.

The oil-rich Gulf monarchies, which boasted strong growth in the last three years thanks to record oil prices, are forecast to show another year of robust growth in 2006, despite a painful correction in the stock markets.

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Gross Domestic Product (GDP) of the six-nation Gulf Cooperation Council showed a real annual growth of just 2.5 per cent on average between 1998-2002 when oil prices dropped sharply.

But real GDP grew strongly by 8.5 per cent, 5.9 per cent and 6.8 per cent in 2003, 2004 and 2005, respectively and is forecast to grow by a healthy 6.4 per cent in the current year, according to the International Monetary Fund.

The GCC groups energy-rich Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE and which together pump around 16 million barrels of oil daily in addition to large quantities of natural gas.

Nominal GDP of the six countries grew from $404.6 billion in 2003 to $475.1 billion in 2004 and a mammoth $597.2 billion last year, recording nominal growth rates of 29.8 per cent, 17.4 per cent and 25.7 per cent, respectively.

The high growth rates were attributed to a sharp rise in oil prices which shot from an average of $35 a barrel in 2004 to $53 a barrel last year and is expected to be in the 60s for the current year, IMF said.

The GCC states are estimated to have posted around $300 billion in oil revenues last year and the figure is expected to rise further in 2006 as oil prices remained strong.

All the six nations have recorded huge surpluses in 2005, especially Saudi Arabia, Kuwait, UAE and Qatar.