Asia growth to outpace Mena
Manama, July 19, 2010
Energy-dependent economies in the Middle East and North Africa (Mena) region, such as Saudi Arabia, the UAE and Libya, have emerged in varying conditions following the global economic recession.
But while they will experience continued growth this is likely to be outpaced by Asia, according to a report by Euromonitor International.
Sharp drops in commodity prices have hit government revenues and dented inward investment, but most will remain stable, even though lower growth will affect businesses and consumers.
'Many countries in the resource-rich Mena region are reliant on energy for government revenues and economic growth,' the report said.
'In 2009, mining and quarrying of energy-producing materials accounted for 59.3 per cent of GDP in Saudi Arabia, which is the region's largest economy.
'Other economies such as Algeria, Libya and Kuwait are also driven by energy exports.
'Virtually all energy producers experienced a period of rapid growth up to 2008 thanks to high crude oil and gas prices, population growth and foreign investment,' it said.
'However, the global economic recession caused energy prices to plummet - crude oil tumbled from a peak of $147 per barrel in July 2008 to around $30 in early 2009 before rising to $80 as of June 2010.
'This has brought various impacts on energy-reliant economies, with Kuwait and the UAE the worst affected.'
'Although real GDP growth slowed sharply in 2009 across energy producers, only Kuwait and the UAE experienced negative growth, down 2.7 per cent and 0.7 per cent respectively,' said the report.
'The former was due to heavy reliance on energy exports, while the latter was driven by debt and asset bubble problems in Dubai.
While the dynamics differ in each country, overall growth is dependent on energy prices and the demand from major energy consumers such as China.
'With the exception of Qatar, the region is not expected to return to the breakneck growth it experienced prior to 2008 in the short-term, and although regional growth will be higher than in advanced economies, it will be outpaced by other developing regions - particularly Asia.'-TradeArabia News Service