The aggregate gross domestic product (GDP) of the six-member states Gulf Cooperation Council 9GCC) is estimated to reach $1.5 trillion in 2013, a Qatar National Bank (QNB) study said. Propelled by the oil and gas sector, the region's traditional driver of the economy, the combined GDP of GCC is likely to reach this figure mentioned above, considering Brent oil prices averaging around $108 per barrel in 2012-13, it said. The GCC countries had a combined nominal GDP of $1.4 trillion in 2011, which accounts for 2.0 percent of the global GDP. The GDP of the GCC has almost quadrupled in nominal terms since 2001, growing at a compound annual growth rate (CAGR) of 14.2 percent. This has led to a near doubling in its percentage share of global nominal GDP from 1.1 percent in 2001 to 2.0 percent in 2011. The study forecast the region's real GDP growth would reach 4.6 percent in 2012-13, outperforming the global GDP growth, which the IMF expect at 3.6 percent. The IMF's Middle East and Central Asia Department Director Masood Ahmed who said “Middle East oil exporters are benefiting from high oil prices, and we expect GDP growth to strengthen and become more broad-based this year.” GCC real GDP grew at an annual rate of 4.7 percent from 2007-11, compared with a world growth rate of 2.8 percent, making it one of the fastest growing regions in the world, the study noted. Further, the QNB report is encouraged to peg its optimistic outlook on strong government spending which has encouraged diversification. The repot also forecast that the real GDP will grow 4.6 percent in 2012-13. Gas production growth at 4.3 percent will outpace oil production growth at 0.4 percent due to stable global demand, it further said. The non-hydrocarbon sector will grow around 9.0 percent in 2012-13, driven by manufacturing, particularly heavy investments into petrochemicals, fertilizers and metals production in Qatar and Saudi Arabia, and construction. High levels of public expenditure will drive growth of 5.6 percent in services in 2012-13, which is largely made up of government and financial services and is expected to account for 36 percent of nominal GDP, the QNB report said. The frenetic economic activity has attracted and continues to attract foreign skilled and unskilled workers to the region resulting in population growth that is almost triple the world rate with about 50 million people expected to be living in the GCC by 2013. “The GCC is likely to have a larger current-account surplus than either Japan or Germany in 2012-13 as high oil prices boost exports,” the study noted. With oil and gas being the traditional drivers of the economy of the region, “around 86 percent of the GCC's $1.2 trillion in total revenue for 2012-13 will come from the oil sector, supporting forecast expenditure of $1.0 trillion on social investments, administration and infrastructural development projects.” “The banking sector is resilient, well capitalized, profitable, has a low level of non-performing loans and is favorably placed to withstand turbulence in global markets during the forecast period.” On the share market, the report said “the outlook for regional bourses is positive as government expenditure and solid GDP growth will support corporate profitability in 2012-13.” “The GCC's business environment is internationally competitive, ranking above the eurozone in the World Bank's Doing Business rankings (#30) and the WEF Competitiveness rankings (#25) in 2012. Regarding inflationary trend, the report said “Inflation is expected to reach 3.0 percent in 2012-13 mainly due to rising rents in Saudi Arabia, without which forecasted inflation would only be 1.8 percent”. Regional oil production grew at 1.5 percent in 2007-11, to reach 19.4m barrels/day (b/d), while gas production surged ahead by 9.9 percent a year to 35bn cubic feet/day (cu ft/d). The strong increase in gas production is mainly attributable to Qatar, where production increased at a rate of 24 percent in 2007-11 to 14.4bn cu ft/d. The GCC accounts for 36 percent of the world s proven oil reserves and 22 percent of gas reserves, equating to 30 percent of global hydrocarbons reserves, measured in barrels of oil equivalent (boe), the report said.
