Arab World best economic performer
The combined Arab economy grew by 6.4 per cent in real terms in 2008 to
emerge as the best performer in the world despite a sharp slowdown in
the second half of the year, official figures reveal.
The
highest growth was recorded in the UAE and other GCC members, which had
been through the second oil boom period before ending with the global
fiscal crisis. The real gross domestic product of the Arab states
recorded a high growth of about 6.23 per cent in 2007 and it maintained
that trend in 2008 to rise slightly to about 6.4 per cent, thanks to
strong crude prices.
Growth was mainly fuelled during the first
half of the year as the economies of most Arab League members suffered
from a slowdown in the second half because of the collapse in crude
prices from a record high of $146 (Dh535) a barrel in late July to less
than $40 towards the end of the year, the Inter-Arab Investment
Guarantee Corporation (IAIGC) said in a study.
A breakdown
showed all Arab countries except Mauritania recorded above-world
average growth, with Qatar topping the list at as high as 16.4 per cent.
Growth
in Iraq was put at 9.78 per cent while it stood at 8.5 per cent in
Lebanon, 7.4 per cent in the UAE, and 7.16 per cent in Egypt.
Taken
as a group, the GCC countries recorded the world's highest real growth
of around 7.7 per cent in 2008 as a result of a sharp increase in their
oil income, higher public spending and a rise in private investment.
IAIGC
said the situation was expected to reverse in 2009, when the Arab
economies will sharply slow down in line with the global downturn. It
attributed this to the plunge in crude prices and lower Arab oil output
as per Opec agreements to trim supplies to keep prices firm.
"According
to projections by the International Monetary Fund, the Arab real GDP
growth could dip to 2.5 per cent this year despite the measures taken
by many regional governments to cushion the effects of the global
crisis," IAIGC said.
"This is because of a steep decline in oil
prices and production by regional states as well as tightening
international credit and a decline in demand for exports of Arab
countries, mainly non-oil members. The economic slowdown in the Arab
region will affect both oil and non-oil member states."
The
surge in crude prices last year because of a strong global demand
boosted the collective Arab oil income to an all-time high of nearly
$618bn from $408bn in 2007. The income is projected to dip below $400bn
in 2009 because of lower prices and a cut of nearly 2.5 million bpd in
oil supply.
In nominal terms, the surge in oil revenues boosted
the GCC's GDP by nearly 30 per cent to its highest level of about $1.03
trillion in 2008.
But it is expected to tumble by nearly 23 per cent to about $800bn this year.
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