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03 October 2023

World Bank puts growth in region at 4.3% in 2011

By Staff

An increase of around $18 in crude prices boosted the income of hydrocarbon producers in the Middle East and North Africa (Mena) by nearly 28 per cent in 2010 while their economies recorded a slight pick up, according to the World Bank.

From around $450 billion in 2009, the oil export earnings of Mena countries surged to nearly $575 billion in 2010, the Washington-based World Bank said in its global economic report released this week.
“The increase helped push the current account - and fiscal positions of most exporters back into positive territory – though 2010 fell well short of 2008 peaks.”
It said the divergent results in the region are tied to the degree of restraint placed on crude oil production and difficulties for several exporters in maintaining current output levels against physical, technology or resource limitations.
The report said Saudi Arabia, the world’s top oil exporter, bore the brunt of production cutbacks during 2009-2010, adding that nearly 35 per cent of the country’s crude output capacity is currently idle.
“During the year, oil production increased by between 1.5 and 2.5 per cent across the Gulf Cooperation Council (GCC) and developing oil exporters. For the latter group, the upturn in oil revenues will provide only partial support for GDP growth, as most countries have focused attention on raising domestic demand.”
The report said the increase in the GCC’s oil revenue helped spur demand and boosted the local economy of most members.
In Saudi Arabia, government and quasi-government investment spending supported growth of around 3.7 per cent up from about 0.2 per cent in 2009. Kuwait is projected to register positive growth in 2010 (1.9 per cent) after a four per cent percent decline in 2009, the sharpest downturn among the GCC.
“In the UAE, the Dubai debt issue dominated the policy agenda. Following a seven per cent GDP advance in 2008, real GDP dropped 2.5 per cent in 2009 and is expected to pick-up 2.4 per cent in 2010,” the World Bank said.
Its forecasts for all Mena countries showed real GDP growth picked up slightly to around 3.3 per cent in 2010 from 3.1 per cent in 2009 and growth is projected to increase to nearly 4.3 per cent in 2011 and 4.4 per cent in 2012.
The report showed oil prices, which approached $100 towards the year end, soared by nearly 28 per cent to an average $79 a barrel in 2010 from around $61 in 2009. But they remained way below the peak price of $95 in 2008.