Mena exports rebound to go on

Export growth is expected to rebound in 2010-2011 positively in the Mena region impacting government revenues and investment opportunities, according to business intelligence firm Uromonitor International.

The Mena region came out relatively unscathed from the global economic crisis of 2008-2009 compared to other regions, partly owing to oil revenues that allowed Middle East economies to swiftly introduce big stimulus packages and enabled the Mena economies to resume growth earlier than other regions.

In 2009, the Mena region posted a 2.3 per cent real GDP growth, compared to a contraction of 1.7 per cent in Latin America.

The Mena region is heavily dependent on exports, particularly energy,  for overall growth and suffered severely from the global economic crisis of 2008-2009.

However, in 2010 export markets rebounded strongly thanks to higher oil prices and increased demand for exports from Asian Pacific economies. This upturn in the export market will help push overall growth of economies in the Mena region in 2010-2011.

As the global economy recovers slowly, crude oil prices bounced back in 2010 averaging $76.8 per barrel between January-August 2010 compared to $55.8 per barrel in the same period of 2009. This will positively impact oil-exporting Mena economies as higher oil prices will bring in higher revenues.

Economies in the Mena region are set to recover strongly owing to the rebound in exports in 2010, with annual real GDP growth being forecast to reach 4.4 per cent, up from 2.3 per cent in 2009. In particular, Qatar (the world's largest LNG producer) is forecast to grow by 18.5 per cent in 2010, amongst the highest real GDP growth rates in the world during the year.The global economic crisis of 2008-2009 severely affected the export market in Middle East and Africa with total exports falling by 30.5 per cent (in $ terms) in 2009 to $1.1 trillion. The Mena accounts for over 75 per cent of the region's exports each year and total exports for this region fell by 30.7 per cent in 2009 to $817 billion.

In the first half of 2010 exports from the region rebounded by 35 per cent year-on-year (y-o-y) according to the World Trade Organisation (WTO) owing to the increase in crude oil prices and growing demand for commodities from Asia. Together this will result in a strong recovery of the export sector aiding overall growth in the region, the report said.

Within the Mena, Algeria and Kuwait witnessed the highest annual decrease in 2009 while most other countries recorded a double-digit decline. Export growth in these two countries fell by 44.8 per cent and 42.5 per cent respectively in 2009.

In terms of export dependence, in 2009, the UAE and Oman had the highest exports to GDP ratios of 78.6 per cent and 60.8 per cent respectively. Countries such as Bahrain, Libya, Iraq, and Saudi Arabia also had high exports to GDP ratio (above 50 per cent), the report said.

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