The nominal gross domestic product (GDP) of Gulf region reached a new record high of $1.56 trillion in 2012, up from $1.44 trillion the previous year on the back of resilient oil prices and record exports, said a leading economist.
For 2013, the GCC nominal GDP is forecast to rise to $1.61 trillion, while the UAE nominal GDP is projected at $368 billion.
"2012 was a record year in many respects. It was the second consecutive year with the average price of oil above $100 per barrel," stated Dr Gıyas Gökkent, the group chief economist of National Bank of Abu Dhabi (NBAD).
The average price of crude oil (Dubai, spot) was the highest ever at $109.1 per barrel and up from $105.5 per barrel in 2011. The oil production by the GCC region was also at a record level, with crude oil output averaging about 17 million barrels per day, he added.
"In aggregate, the GCC region continued its climb and became the 12th largest economy in the world, behind 11th ranked Canada," said Gökkent.
According to him, Saudi accounted for 47 per cent of the GCC economy, while the UAE had 23 per cent share. Qatar and Kuwait had 12 and 11 per cent of the GCC economy, respectively, while Oman and Bahrain had about 5 and 2 per cent.
GCC real GDP growth rate slowed from an estimated 7.4 per cent in 2011 to 5.3 per cent in 2012. Saudi Arabia accounted for about 48 per cent of the GCC real GDP growth rate, while the UAE accounted for 25 per cent.
On exports, Gökkent said, "For the first time ever, GCC value of exports reached $1 trillion, up from $932 billion in 2011. This is almost double the 2009 level of $526 billion."
The UAE value of exports, he stated, accounted for about a third of the GCC total. The value of oil and related exports hit a new high of $692 billion, up from $644 billion in 2011.
GCC is estimated to have registered a trade surplus of $558 billion in 2012 (up from $529 billion in 2011), again a new record. Services account remained in deficit, while workers’ remittances were a record $77 billion culminating in an aggregate current account surplus of $346 billion, equivalent to 22.3 per cent of GDP, said Gökkent.
Saudi Arabia accounted for 52 per cent of the GCC current account surplus with $178.5 billion. The UAE current account surplus is estimated at $32 billion (8.8 per cent of GDP) in the same period.
Gökkent pointed out that GCC budgetary expenditures rose to a record $491 billion, up from $467 billion in 2011. "Nevertheless, the aggregate budget surplus was substantial at $222 billion, equivalent to 14.3 per cent of GDP reflecting the buoyancy of hydrocarbon revenues."
The UAE economy is estimated to have registered a consolidated fiscal surplus equivalent to 7.8 per cent of GDP, the best performance since 2008, he added.
In 2013, the real GDP growth rate in the GCC region is expected to hit its slowest pace since 2009 at about 3.8 per cent. The UAE economy is forecast to grow by 3.2 per cent year-on-year.
"The main culprit for the slowdown is expected to be a flattening in hydrocarbon sector growth. The crude oil output of the four GCC Opec members rose to 16.3 million bpd in August 2012, but has since declined every month and stood at 15.2 million bpd in January 2013," remarked Gökkent.
According to him, Saudi Arabia accounted for about 73 per cent of the decline in output amongst the GCC Opec members in that period.
On the non-oil sectors, Gökkent said it is likley to grow by a healthy 5.4 per cent year-on-year in 2013, spearheading overall economic activity given the slowdown in hydrocarbon activity. The GCC nominal GDP is forecast to rise to $1.61 trillion in 2013.
GCC trade surplus is forecast to ease to $492 billion, while the current account surplus is estimated at $270 billion (16.8 per cent of GDP). The fiscal surplus is forecast to ease to $171 billion (10.6 per cent of GDP).
UAE is forecast to register surpluses in its current account and budget equivalent to about 8.5 per cent and 6.8 per cent of GDP, respectively. Oil prices at these levels will continue to allow GCC to accumulate international assets and retain their usual role of being capital exporters.-
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