Gulf nations to see "cautious growth" in 2010: Emirates NBD

21:32, January 25, 2010      

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Economies of the Gulf Cooperation Council (GCC) are set to see an average growth of between 3 percent and 4 percent this year, senior executives at Emirates NBD, the region's largest bank by asset size, said Monday.

The bank predicted real GDP growth during this year of 2.5 percent for the United Arab Emirates (UAE), 3 percent for Saudi Arabia, 1.5 percent for Kuwait, 3 percent for Oman, 2.5 percent for Bahrain, and 10 percent for Qatar, according to the website of Arabian Business, a local business journal.

More traditional markets would stagnate, with GDP growth for the Eurozone predicted at 1 percent, for Britain at 0.5 percent and Japan at 1 percent, Emirates NBD said, adding that growth was predicted at 2.5 percent for the United States and a still-strong 10 percent for China.

"This will be a year of rehabilitation," Tim Fox, chief economist of Emirates NBD, was quoted as saying.

"But it's important to retain a degree of reality; there won't be runaway growth and it will be relatively cautious," he said.

According to Fox, Emirates NBD would advise its clients to have a strong balance of assets, indicating that there were likely to be more mergers and acquisitions during the course of this year, with healthcare a notable possibility in this field.

Some of the reasons for the bank's bullish forecast were the strong indicators emanating from regional economies about their own predictions this year, he added, saying that in the past week or so, Qatar has estimated its own growth at 11 percent, with Oman coming in at 3.7 percent.

"Although the global recovery is well underway, it is unlikely that economies will return to their trend growth rates before 2011, " Fox said.

"The next 12 months will likely see a continued recovery of the U.S. dollar. However, investors will have to remain wary of rising bond yields and generally volatile trends in emerging markets," he said.

The GCC, a regional trade bloc created in 1981, comprises the Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, have about 45 percent of the world's proven oil reserves.

Source: Xinhua
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