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18 April 2024

Mena, Asia and Australasia to drive global recovery

By Suchita Kapur

GDP growth in the Middle East and North Africa (Mena) coupled with that in Asia and Australasia is expected to lead global recovery in 2010, according to the latest Global Outlook report by the Economist Intelligence Unit (EIU).

The Mena, with a 4.2 per cent real GDP growth forecast for 2010, is second only to the projected 4.5 per cent growth in Asia and Australasia. Sub-Saharan Africa region is expected to see a 4.1 per cent growth.

On the other hand, North America will see a 2.5 per cent growth; Latin America 3.5 per cent and transition economies two per cent.

Western Europe is in the bottom of the list, with an expected recovery of one per cent, dragging down the global GDP growth estimates to 3,6 per cent in 2010.

Saudi Arabia and the UAE, the two largest economies of the GCC, will resume growth in 2010, it said.

"Our estimate of real GDP growth in 2009 in Saudi Arabia has been revised up to 0.2 per cent (previously a contraction of one per cent), based on a smaller drop in export volumes and lower import volumes. Despite significant spare capacity, oil production will rise gradually in 2010, but this will help to boost GDP growth to 3.2 per cent in that year.

"In the UAE, a gradual increase in oil output and the coming on stream of several projects in Abu Dhabi are expected to drive growth of 3.4 per cent in 2010."

After growing by just 1.5 per cent in 2009, GDP growth in the Mena is forecast to pick up in 2010 supported by higher oil prices, a stronger economy and loose domestic policy conditions.

North Africa, which is dependent on the EU as an export market, will benefit from some recovery in EU demand in 2010.


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