Dubai: The Gulf Cooperation Council (GCC) countries are poised for strong economic growth this year despite heightened regional geopolitical risks, Dubai Chamber of Commerce and Industry (DCCI) has said.
The GCC countries combined are estimated to grow 5.4 percent in 2012, it said.
Quoting the latest International Monetary Fund (IMF) numbers, combined with data from national authorities, a DCCI study has said the UAE will see year-on-year GDP growth of 4.5 percent in 2012.
Kuwait, Oman and Bahrain are likely to record growth of 4.9 percent, 4 percent and 3 percent, respectively. Besides, Saudi Arabia and Qatar will expand at 5.1 percent and 9.4 percent.
The study said upward trajectory of oil prices should strengthen the fiscal and current account balances of GCC countries.
"In Saudi Arabia, Kuwait and the UAE, larger fiscal surpluses and greater accumulation of reserves are projected. As such, for the GCC as a whole, IMF projects that fiscal and current account surpluses will stand at 13.1 percent and 22.2 percent of GDP in 2012, respectively," DCCI said.
The study further states that regional growth is supported by its ongoing expansionary fiscal policies.
Higher allocations to current public spending, notably on wages such as those recently announced in the UAE and Kuwait, will boost domestic demand and non-hydrocarbon growth.
In fact, non-hydrocarbon growth reached a record high in Saudi Arabia in 2011 increasing by 7.8 percent, while it is projected to remain at high levels in 2012 with 5.3 percent increase.
Similar trends are projected to take place in Kuwait and Oman, where fiscal spending has been on the rise. In UAE, the upward trajectory of the non-hydrocarbon sector remains elevated for 2012 and is projected to increase by 3.9 percent year-on-year from 3.3 percent in 2011 and 2.1 percent in 2010.