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25 April 2024

Mena nominal GDP hits $2 trillion

Qatar is leading the growth in GCC at 16 per cent (FILE)

By Staff

Middle East and North Africa (Mena) region’s gross domestic product (GDP) has grown by 12 per cent in mominal terms last year, reaching $2 trillion mark, Global Investment House said in a study released on Monday.

The region’s population grew by 2.3 per cent to reach 346 million while the oil-driven economies of Mena suffered during the global financial crisis in 2009 due to lower oil prices. The region as a whole was slightly impacted and continued to witness growth and is projected to post three per cent real GDP growth in 2010.

The region is expected to continue its growth in 2011, backed by higher oil prices and increasing capital inflows from international investors.

All countries of the GCC are expecting to post growth in terms of real GDP for 2010. The average growth of the region is expected to be 4.5 per cent reaching $567 billion, with Qatar leading the way at 16 per cent. Based on IMF projections, the region is forecasted to post even stronger growth in 2011.

The real GDP growth for the GCC in 2011 is projected to reach 5.9 per cent, with Qatar leading the way yet again at 20 per cent. The average barrel price of WTI for 2010 was $79.5, and the consensus forecast for 2011 is $87. “Since the GCC is a predominately oil-driven region, we expect hydrocarbon revenues to witness strong growth during 2011 due to increasing oil prices,” said Faisal Hasan, Head of Research at Global Investment House.

Levant & Iraq region is expected to post positive GDP growth in 2010 and is forecasted to do so strongly in 2011. Real GDP growth of the region is expected to grow 4.1 per cent in 2010 and expected to grow 5.8 per cent in 2011.

The growth is attributed to the region opening up its economy for more foreign investments as witnessed in Iraq issuing several oil and gas licenses to develop several field areas, Syria welcoming investments in its infrastructure and hydrocarbon sector and Lebanon witnessing an improvement in its sovereign ratings.

Overall, growth and prosperity is expected in the Levant & Iraq region as countries pursue larger budgets, new tax and privatization laws, low barriers for FDI, and a stronger consumer demand driven by the 69 million population living in the region.

North Africa’s GDP is projected to increase by three per cent during 2010 and is expected to post further growth in 2011. The oil sector of the region has performed soundly due to an increase in oil prices, after witnessing a slowdown in 2009 due to Opec limitations. The governments of the region have mostly shown a deficit in the fiscal balance due to investment and infrastructure projects. The increasing oil production and foreign inflows in the region for developing the oil infrastructure will allow North Africa to witness further growth.