17/04/2011
Kingdom’s GDP expected to jump 7.5% in 2011
The Arab Spring has divided the economies of the Middle East into clear winners and losers, as unrest disrupts business in some countries while the resulting climb in oil prices benefits others, new estimates from the International Monetary Fund (IMF) show.
Overall, the economies of the region are forecast to expand 4.1 percent this year, the IMF said in its World Economic Outlook published on Monday. But the oil exporting countries will see real gross domestic product increase 4.9 percent while nonoil economies will grow just 1.9 percent. In the IMF’s previous forecast, published last October, growth between oil and nonoil economies was about the same at 5 percent and 5.2 percent, respectively.
Meanwhile, Saudi Arabia, with the world’s biggest petroleum reserves, will see GDP jump 7.5 percent in 2011, up from 4.5 percent in the IMF’s previously forecast. The smaller economies of Qatar and Kuwait will also show stronger growth than earlier forecast.
Said Hirsh, Middle East economist at London-Based Capital Economics, noted that the oil boon has enabled petroleum exports to shower their economies with infrastructure spending, job creation and subsidies.
“The Arab Spring prompted the Gulf countries to spend a lot, especially Saudi Arabia. So, our view on the Gulf economies is generally very positive,” Hirsh told The Media Line. “If you move to the poorer countries, the picture is very different: They don’t have the financial resources to spend their way out of problems.”
Inflation in the Middle East is being stoked mainly by higher food prices, the IMF said. The region is a large net importer of food while the IMF’s Food Price Index has risen 41 percent since mid-2010 to a record high.
