The non-hydrocarbon economies of oil producers of the Gulf Cooperation Council (GCC) are projected to grow by around 2 percent this year despite a sharp decline in the oil sector because of lower crude production and prices, a local daily reported Sunday.
But the rate remains far lower than that recorded in 2008, when GCC nations' real GDP increased by around 6.5 percent as a result of a sharp rise in public spending due to a surge in their oil income, Emirates Business said, quoting a study by the Washington- based Institute of
International Finance (IIF).
"Growth in the non-hydrocarbon sector is estimated to have decelerated to about 2 percent in 2009 as compared with 65 percent in 2008," the IIF said.
According to the study, the decline in 2009 will be a result of lower private investment and consumption but it was partly offset by massive
public spending on infrastructure.
"The pace of the slowdown in the non-oil sector is expected to ease as the global economy is beginning to pull out of recession and as oil prices rose from an average 51 dollars a barrel in the first half of this year to around 68 dollars a barrel in the third quarter," it added.
The study showed that Oman, which is less reliant on oil exports than most other GCC members, will record the highest non- oil growth rate of about 5 percent this year. Qatar, a major gas power, will see a 4 percent
growth while the non-hydrocarbon GDP of Bahrain, another diversified economy, will grow by around 2.1 percent.
The United Arab Emirates (UAE) will record the lowest non-oil growth among GCC members, as its non-hydrocarbon GDP is expected to rise by 0.5
percent. Saudi Arabia's non-hydrocarbon GDP will likely grow by 2.3 percent and Kuwait's by 2 percent.
GCC nations' oil sector was hard hit by the decline in crude prices and output, according to the study. Except Oman and Qatar, other members of the regional bloc will see a negative growth in their oil sector this year.
The study said that overall, real GDP growth was forecast at 9. 3 percent in Qatar, 5.2 percent in Oman, and 1.9 percent in Bahrain. The UAE's
GDP is projected to slip by 1.5 percent while that of Saudi Arabia and Kuwait will drop by 1.2 percent and 1.9 percent respectively.
The GCC, a regional trade bloc created in 1981, comprises the Persian Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.