Gulf Economies Growth Likely to Taper Off in 2013, Moody Says

Economic growth in the six-nation Gulf Cooperation Council is set to slow to about 3.5 percent this year from 5.7 percent in 2012, Moody’s Investors Service said in a report today.

High oil prices and expansionary fiscal policies will not provide as much of a boost to growth in the GCC, which includes the U.A.E, Kuwait, Qatar, Saudi Arabia, Bahrain and Oman and supplies about a quarter of the world’s crude oil, Moody’s said.

GCC governments are likely to continue recording large fiscal and current account surpluses, according to the report. GCC country ratings have been stable since the global financial crisis and during the Arab Spring, and any vulnerability to a fall in oil prices is offset by assets held by sovereign wealth funds, Moody’s said. Exceptions are Oman and Bahrain, it said.

The average economic growth rate among non-oil-importing countries in the Middle East and North Africa will be about 2.6 percent this year versus 2.2 percent in 2012, Moody’s said. Its baseline scenario assumes oil prices will average $112 a barrel in 2013.

In a Feb. 27 report, the Centre for Economics and Business Research Ltd. said it expected GCC growth to ease to 4.8 percent from 6 percent in 2012. That compares with a growth forecast of 3.9 percent for the entire Middle East this year, the London-based group said.

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