MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Gulf Cooperation Council Region
Regional Economic Developments
Record average oil price and sales
Oil exporting economies continue to do well given historically high oil prices and
production levels. Dubai crude is projected to average US$ 108.5/bl in 2012 which will
be the highest on record after an average of US$ 105.5/bl in 2011. While the average
figures are below the high of US$ 140/bl registered on July 7th, 2008, the overall
average for 2008 had actually been US$ 94/bl. GCC crude oil production is estimated to
average 16.9 million bpd in 2012 - highest annual average figure on record. High oil
prices will allow GCC to accumulate international assets and retain their usual role of
being capital exporters. GCC is forecast to register a current account surplus of 22.9% in
2012 and 18% in 2013.
GCC is forecast to post a fiscal surplus of US$ 177.2 billion in 2012 (12% of GDP), up
from US$ 153 bn in 2011. GCC fiscal surplus is forecast at US$ 124 billion in 2013 (8.2%
of GDP). Two GCC member states are expected to account for the bulk of the GCC
surplus. These are Saudi Arabia and Kuwait. Bahrain is expected to register a deficit.
GCC real GDP growth rate is forecast to decelerate to +4.3% y-o-y in 2012 from +6.7%
y-o-y in 2011. Growth is expected to slow down further to +3.9% y-o-y in 2013. This is
primarily based on a slowdown in oil output growth. GCC hydrocarbon sector output
growth is estimated at +3.8% y-o-y and +1% y-o-y in 2012 and 2013, respectively (down
from +7.8% y-o-y in 2011). Non-oil output is projected to grow by +4.5% y-o-y and +5.3%
y-o-y, respectively, in the same period (+5.9% in 2011). By country, we estimate that
Saudi Arabia and UAE will account for 42% and 27% of the rise in GCC real GDP growth
in 2012, respectively. Qatar is expected to account for about 12% of GCC real GDP
growth, down from 25% in 2011 as its ramp up of gas production ends. Nominal GDP is
expected to rise in all GCC economies in 2012. Forecasts indicate that GCC nominal
GDP will be roughly US$ 1.44 trillion in 2012 and circa US$ 1.5 trillion in 2013. Estimates
indicate that the GCC will be the 13th largest economy in the world in 2012, up by one
notch from 2011 and overtaking Spain.
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