JEDDAH — The net foreign assets of the six-member Gulf Cooperation Council (GCC) countries surged by $456 billion in 2011 to historic high on strong oil prices, the Institute for International Finance (IIF) said.
The region’s hydrocarbon export receipts were forecast to jump to around $730 billion in 2012 from an estimated $685 billion in 2011.
The combined net foreign assets of the group climbed to an all-time high of nearly $1,605 billion at the end of 2011 from around $1,149 billion at the end of 2010, after plunging in 2009 due to 2008 global financial crisis.
The Washington-based IIF showed the assets would further swell by nearly $300 billion to $1905 billion at the end of 2012 and rise again to a new record of $2,139 billion at the end of 2013 as oil prices are projected to remain high.
It said high prices and output boosted the GCC’s combined nominal GDP by nearly 31 percent to a record high of around $1.4 trillion last year.
"Buoyant hydrocarbon revenue contributed to large fiscal and external surpluses despite strong import growth and fiscal expansion… the GCC’s consolidated external current account surplus is expected to increase to a new peak of $358 billion in 2012, compared with an estimated $327 billion in 2011."
Most GCC states recorded sharp increases in their net foreign assets in 2011.
Saudi Arabia’s assets, controlled by the Saudi Arabian Monetary Agency, soared by around $106 billion from $445 billion to nearly $551 billion in the same period.
The UAE posted a growth of around $59 billion to $521 billion from about $462 billion at the end of 2010.
It expected the country’s foreign assets, mostly held by the Abu Dhabi Investment Authority (ADIA), to continue rising in the next two years to reach around $579 billion at the end of 2012 and $630 billion at the end of 2013.
Kuwait’s assets controlled by Kuwait Investment Authority and other institutions stood at $396 billion at the end of 2011 and were projected to leap to $457 billion at the end of 2012.
Qatar’s net foreign assets were put at $59 billion and are expected to surge to nearly $107 billion in the same period.
The report estimated the assets of Oman and Bahrain at $16 billion and $18 billion, which could respectively rise to $19 billion and $20 billion.
The report further said Qatar’s Investment Authority now controls a record $200 billion while Kuwait’s assets have exceeded that level.
"The diversified nature of investments, and the projected large current account surpluses, should result in a further increase in the stock of net foreign assets to about $2.1 trillion by end- 2013, equivalent to 140 percent of projected GDP…. about 60 percent of the foreign assets of the region are managed by sovereign wealth funds (SWFs) and invested in diversified portfolios of public equities, fixed income securities, real estate, and minority shares in big-name global companies," the report said. — SG