GCC economy hits $ 1.56t

“Non-oil sectors are forecast to grow by a healthy 5.4 per cent year on year in 2013, spearheading overall economic activity given the slowdown in hydrocarbon,” the report said.

GCC is estimated to have registered a trade surplus of $ 558 billion in 2012, and in 2013, it is forecast to ease to $ 492 billion, the report said.

Saudi Arabia accounted for 47 per cent of the GCC economy, while the UAE accounted for 23 per cent. Qatar and Kuwait accounted for 12 per cent and 11 per cent of the GCC economy, respectively. Oman and Bahrain accounted for about five per cent and two per cent, respectively.

The bank said the real GDP growth of the region 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.

Dr Gýyas Gokkent, NBAD’s group chief economist, said for the first time ever, value of GCC exports reached $ 1 trillion, up from $ 932 billion in 2011. This is almost double the 2009 level of $ 526 billion. The value of UAE exports accounted for about a third of the GCC total, he said.

In 2012, oil production by the GCC region was also at a record level, with crude oil output averaging about 17 million barrels per day. Last year was a record year in many respects. “It was the second consecutive year with the average price of oil above $ 100 per barrel. 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,” said the report.

The value of oil and related exports rose to a new record high of $ 692 billion, up from $ 644 billion in 2011.

NBAD said the 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 the GDP.

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 the GDP). The fiscal surplus is forecast to ease to $ 171 billion (10.6 per cent of the GDP). The 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 the 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,” said the report.

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 the GDP) in the same period.

The bank said 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 the 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 the GDP, the best performance since 2008.”

In 2013, real GDP growth rate in the GCC region is expected to slow to the 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 reason for the slowdown is an expected 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. Saudi Arabia accounted for about 73 per cent of the decline in output amongst the GCC OPEC members in that period,” said the report.