Thursday, Jan 13, 2011

Mena region’s export mix based on oil and materials survived the crisis that hurt capital goods

region expected to grow 4.3% on strong domestic demand, exports and oil

Middle East economies to grow at 4.3 per cent in 2011: World Bank

Most developing countries have recovered from crisis, projects steady global growth

Dubai Developing economies in the Middle East and North Africa (Mena) region are expected to grow at 4.3 per cent this year, after witnessing a modest upturn in growth of around 3.3 per cent in 2010, a latest World Bank report said.

“Higher oil prices in the year benefited oil exporters, while rebound in parts of the euro area — and growth in high-income Gulf Cooperation Council (GCC) countries helped to support a revival in exports, remittances and tourism,” according to the World Bank’s half-yearly Global Economic Prospects 2011, released yesterday, a copy of which was obtained by Gulf News.

“After an advance of 3.3 per cent in 2010, the region is expected to enjoy stronger gains of 4.3 per cent and 4.4 per cent in 2011 and 2012 respectively, as domestic demand growth continues, export markets firm, and oil prices remain at high levels,” it said.

The UAE economy is expected to grow at a rate between 3.2 per cent to 4 per cent, according to various estimates.

A recent Standard Chartered Bank report had said that “growth should accelerate further across the region in 2011, but Mena economies are unlikely to boom”.

“Growth in the GCC in 2011 will be driven by hydrocarbons, infrastructure investment and private sector activity. The outlook for oil prices and production will be key. Oil production in most of the GCC is unlikely to increase, as the region has to comply with Opec quotas. We do not expect significant changes to these quotas in 2011, so the direct impact of the oil sector on real growth should be moderate.”

Developing world leads

The world economy is moving from a post-crisis bounce-back phase of the recovery to slower but still solid growth this year and next, with developing countries contributing almost half of global growth.

“More than two years after the crisis triggered by the collapse of the Lehman Brothers, now the world economy has entered into the new phase of recovery,” Justin Yifu Lin, the World Bank’s chief economist and senior vice-president for development economics, said in a briefing in Washington, the transcript of which was obtained by Gulf News.

“We know that most developing countries have recovered to the pre-crisis level activity, or close to the pre-crisis level of activity. That means that we have went through this bounce-back phase to a more mature growth phase, and by that we expect the growth rate this year in the developing countries will moderate somewhat.

“And according to our forecast, the growth rate for the developing countries in 2011 will decline from 7 per cent of growth rate in 2010 down to 6 per cent, and next year, 2012, it’s likely to recover a little bit to 6.1 per cent,” he said.

India could be one of the growth engines in 2011 for both Asia and the world according to the latest Strategic Focus study published by Bank Sarasin’s Research team.

By Saifur Rahman?Business Editor

Gulf News 2011. All rights reserved.