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IIF forecasts solid growth for GCC in 2010

The Institute of International Finance (IIF) is forecasting a return to solid growth for Gulf Cooperation Council (GCC) states in 2010. The IIF expects current account and fiscal surpluses to remain “sizable,” driven by a recovery in oil prices. The partners of TradeFlow21 believe that while oil of around $70/bbl is less than half of last year’s peak, its more than doubling since the trough, not to mention the sizable domestic investments made by the GCC, make the soundness of their economies and finances all the more laudable. In fact, according the IIF, the Gulf’s non-hydrocarbon sector, which employs 95% of the labor force, avoided a recession in 2009 (with a growth forecast of 2% this year and 4% next year).

IIF GDP forecasts for the GCC:

Qatar — ‘09: 9.3% and ‘10: 35.5% (fueled by LNG exports and capacity expansion)
Oman — ‘09: 5.2% and ‘10: 9.7%
Bahrain — ‘09: 1.9% and ‘10: 4.1%
Kuwait — ‘09: -1.9% and ‘10: 4.0%
Saudi Arabia – ‘09: -1.2% and ‘10: 3.5%
United Arab Emirates — ‘09: -1.5% and ‘10: 3.4%