Arab economies were star performers in 2009

Arab economies were among the world’s star performers in 2009 although growth in their combined real GDP slumped by nearly half because of the repercussions of the global fiscal distress, according to an official Arab report.

From around 5.09 per cent in 2008, the Arab real GDP growth plunged to nearly 2.42 per cent in 2009 but is expected to sharply rebound this year, said the report by the Inter-Arab Investment Guarantee Corporation (IAIGC).

“Economic activity in the Arab region was adversely affected by the global downturn…but despite this decline in 2009, growth in the Arab GDP is considered good compared to most other economies as the global economy recorded negative growth of 0.6 per cent last year..…performance in the industrial countries was even worse, with their combined GDP contracting by 3.16 per cent, one of the lowest levels since the 1930s,” it said.

“As for 2010, projections by the World Bank and the International Monetary Fund show that the Arab GDP will rebound by around 4.5 per cent as a result of fiscal expansionary measures undertaken by most regional nations.”

The report said Arab economic prospects would also be good this year and the next few years because of large projects to be carried out in most of them.

It estimated those projects at around $768 billion, more than half of which will be carried out in the six-nation Gulf Cooperation Council (GCC).

A breakdown showed Saudi Arabia would pump nearly $170 billion into energy, water and electricity projects over the next six years while around $140 billion would be invested by Qatar in energy, infrastructure and real estate in 10 years.

In Kuwait, around $104 billion will be channeled into similar projects while the UAE is expected to invest about $64 billion in air transport and other projects.

IAIGC, a key Arab League financial establishment, said all Arab countries recorded positive growth last year except Kuwait and Mauritania, with their real GDP shrinking by around 2.67 and 1.07 per cent respectively.

Qatar, the world’s top LNG exporter, by far surpassed all fellow member states, with its GDP racing by nearly 9.04 per cent in 2009.

Lebanon came second in terms of real GDP growth, which stood at nine per cent, followed by Morocco with 5.2 per cent.

The Kuwaiti-based IAIGC estimated growth at 4.7 per cent in Yemen, 4.67 per cent in Egypt, 4.52 per cent in Sudan, 4.21 per cent in Iraq, 3.99 per cent in Syria, 3.35 per cent in Oman, three per cent in Tunisia, 2.89 per cent in Bahrain, 2.75 per cent in Jordan, 2.3 per cent in Algeria, 1.6 per cent in Libya, 1.3 per cent in the UAE, and 0.15 per cent in Saudi Arabia.

“Growth in the Arab region over the past nine years has been better than in industrial countries but lower than other emerging economies…during 2003-2009, Arab growth was better than most other economies, including those of other developing countries and emerging economies,” IAIGC said.
 

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