JEDDAH – The combined GDP of the six-nation Gulf Cooperation Council (GCC) is projected to sustain huge surplus through 2012 and 2013 amid high oil prices, Qatar National Bank (QNB) said in a study.
"Oil prices are forecast to remain high in 2012-2013, resulting in continued strong current-account surpluses around 20 per cent of GDP," it said.
The group’s trade surplus is forecast to remain high during 2012-2013, averaging around $493 billion, based on forecast average oil prices of $106 for the period.
Within the GCC, Saudi Arabia had the lion’s share of the group’s current account surplus, accounting for about 49 percent of the total in 2011, as it is the largest exporter of hydrocarbons in the region.
The main structural change over the last five years is that Qatar’s share has grown from just five per cent in 2007 to nearly 12 percent in 2011, as a result of large expansions in its gas exports.
Kuwait’s surpluses are the largest in relative terms, equal to an estimated 35 percent of its GDP in 2011. Kuwait benefits from a strong income surplus in addition to its trade surplus from hydrocarbon exports.
The UAE has the smallest surplus, at 14 percent of GDP as its economy is less dependent on oil exports, with a large services component to its GDP.
"However, in absolute terms the UAE’s current account surplus is still second in the region," the report said
The region posted current account surplus of nearly $322 billion in 2011 because of a sharp rise in oil exports on account of strong oil prices, the study noted.
The surplus accounted for 23 percent of the combined GDP of the Gulf states.
"This is because the foreign exchange it earns from hydrocarbon exports far outweighs both payments for imports of goods and services and payments by foreign companies and workers repatriating their income," it said.
The GCC, sitting atop more than 40 percent of the world’s oil wealth, has achieved a current account surplus for every year since 1998.
The group’s large crude oil production was estimated at around 16 million barrels per day last year.
In 2011, Saudi Arabia is estimated to have had the world’s largest trade surplus of around $245 billion, just ahead of China, and the GCC regional balance was more than double that size, $520 billion (38 per cent of GDP).
Qatar had the largest relative surplus, at 45 percent of GDP, and Kuwait, Saudi Arabia and Oman were close behind.
Bahrain and UAE had the lowest relative balances, at 16 and 23 percent of GDP respectively in 2011. – SG/Agencies