Oil windfall ups spending power.
Each dollar increase in oil prices adds around $4.5 billion per year to GCC government revenues. An oil price of $100 per barrel in 2011 would lift budget revenues by more than $100 billion compared to last year, or 28 per cent of budgeted spending in 2011, said the latest GCC brief published by NBK.
From $75 per barrel in September 2010, the price of the Opec crude basket increased to $115 in early March 2011.
Mirroring the trend in overall US dollar depreciation since June 2010, GCC currencies have declined by an average of 7.8 per cent in six months, it added.
This seems to cover the cost this year of all of the extra spending measures recently announced in Saudi Arabia and Oman. Bahrain, on the other hand, is likely to see its budget position deteriorate as a net result of higher revenues and additional spending.
The increase in oil income provides extra spending power for those governments undertaking measures to boost living standards for nationals, in an attempt to address social and political grievances.
Abu Dhabi to grow 7pc per year ABU Dhabi plans to grow by an average of 7 per cent a year until 2015 and 6 per cent a year thereafter, supported by economic diversification and a reduced dependence on oil, a bond prospectus showed.
The capital of the UAE, which accounts for most of the country's oil wealth, would expand at total growth in gross domestic product (GDP) of over 500 per cent by 2030, a prospectus by Abu Dhabi's investment vehicle, Mubadala, said.
The 2030 Economic Vision seeks to grow Abu Dhabi's GDP by an average of seven per cent per annum through 2015, and thereafter to stabilise growth at an average of six per cent per annum for total growth in GDP of over 500 per cent by 2030,' the document said.
Its 2030 Economic Vision aims to significantly expand the non-oil sector by 2030 to reach a balance between oil and non-oil trade by 2028.
Bahrain GDP grows to $23bn BAHRAIN'S economy accelerated in the final quarter of last year from the previous three months and grew 4.5 per cent in 2010 as a whole, beating forecasts, data showed.
The kingdom's economy grew 1.1 per cent in the fourth quarter of 2010, accelerating from a revised 0.9 per cent increase in the third quarter.
Full-year growth beat a Reuters poll forecast for a 4.0 per cent expansion and outperformed 3.1 per cent growth in 2009.
The kingdom was rocked recently by public unrest, but its economy continues to recover from the global economic downturn, helped by robust oil prices.
The construction and real estate sectors though have yet to return to pre-crisis levels. Gross Domestic Product compared with a year earlier rose 4.2 per cent in the fourth quarter, slowing from a 4.4 per cent increase in the third quarter.
Saudi economy to expand WITH a spurt in oil output, coupled with greater state spending commitments, the Saudi economy looks set to expand 5.5 per cent in 2011 in real terms, up from a previous forecast of 4.2 per cent, said a report.
As a result of more favorable energy market environment, Saudi Arabia should achieve fiscal revenues of SR904 billion ($241 billion), enabling it to post SR61.7 billion surplus, or 3.1 per cent of GDP, the Arab News reported citing a forecast by Banque Saudi Fransi.
The kingdom's store of net foreign assets hit a record level of SR1.67 trillion ($444.88 billion) as of the end of January, easing slightly in February, it added.
On account of the burst in spending, the top Saudi bank said it has raised the 2011 state expenditure forecast by 24.5 per cent to SR842.4 billion. This represents a substantial 34.5 per cent jump over 2010 figures.
Qatar sees Q4 GDP up 28.7pc QATAR said it estimated gross domestic product in the fourth quarter of last year at QR129.67 billion ($35.59 billion), up 28.7 per cent from the year-earlier period and up 9.2 per cent from the third quarter.
The mining and quarrying sector, which accounts for 53 per cent of GDP, was estimated at QR74.42 billion in the quarter, up 39.4 per cent from the year-earlier period, and up 13.9 per cent from the previous quarter.
The manufacturing sector registered an increase of 36.6 per cent over the corresponding quarter of 2009, with gross value added estimated at QR9.65 billion. However, compared to the previous quarter, the increase was 3.7 per cent.
17pc increase in RAK FTZ licences A total of 522 new companies have registered with Ras Al Khaimah Free Trade Zone (RAK FTZ) in the first quarter of 2011, marking a 17 per cent increase in registrations over the same period of 2010.
RAK FTZ said that a total of 970 licences were renewed during the first quarter of 2011, compared to 710 licences renewed in the corresponding period in 2010, representing an increase of 36.6 per cent.
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