JEDDAH – The recent data on the government spending and business activities in the member states of the Gulf Cooperation Council (GCC) show that these countries will maintain a growth rate as high as four percent in 2012, according to the monthly report of the Gulf Investment Corporation (GIC) for April.
The report released Sunday said the robust growth resulted from the rising prices of oil and the increasing oil exports as well as the expanding government spending.
Regarding the government spending, the report said the GCC countries, notably Kuwait, continued boosting salaries of civil servants to meet the popular demands but such a move has negative economic results.
Among the demerits of pay increments are the weakening of relationship between the productivity of an employee and their pay, the expansion of the salaries chapter in the state budget and the rising of inflation rates. As for the unemployment rates in the GCC countries, the GIC report said the recent data of the Saudi Ministry of Labor showed more than one million people get unemployment benefits under the "Hafeth" (incentive) program which started in the last quarter of 2011.
Under the Hafeth program a job seeker is entitled to nearly $533 social assistance which expands the government spending by some $1.4 billion.
The report also noted that global rating agency Standard and Poor’s (boosted the GCC stocks by 6.44 percent last March, taking the total gains to 16.47 percent on annual basis. the GCC stock markets are rated among the world’s best, it added.
The Saudi Tadawul and the UAE Dubai stock exchanges led the recovery in the GCC region.
The weighted index of Kuwait Stock Exchange (KSE) went up by 2.64 percent in March and by 3.6 percent on annual basis. The service and banking sectors led the gainers while other sectors posted losses in March. – SG