The International Monetary Fund (IMF) has projected that in 2012 Oil prices were expected to remain high; and spillovers from Syria could affect a number of countries in the region.
According to Masood Ahmed, Director, Middle East and Central Asia it is projected to post near-zero growth in 2012 for the European Union (EU) an important economic partner for many MENA oil importers due to difficult international environment.
Meanwhile, continue to post solid growth. While growth for the group as a whole fell from 5 percent in 2010 to about 4 percent last year (mainly due to the conflict in Libya), it reached 8 percent for the Gulf Cooperation Council (GCC). Oil production in GCC states increased, particularly in Saudi Arabia, to compensate for declines elsewhere (primarily in Libya).
“On the back of higher oil prices, the oil exporters’ combined current account surpluses approached $400 billion in 2011—almost double the amount in 2010—which helped lift their reserve position above the $1 trillion mark, support a further increase in other foreign assets, and enable stepped-up government spending,” he said.
Masood Ahmed said in his commentary that oil exporters’ growth in 2012 is expected to strengthen to 4.8 percent and to be more evenly spread between the GCC countries and other oil exporters, as oil prices are expected to average about $115 per barrel.
In the GCC, oil and gas production is expected to remain broadly flat: Qatar’s recent rapid hydrocarbon growth is likely to tail off, pending a moratorium on capacity expansion. Saudi Arabia’s role as a swing producer, moreover, will likely entail a smaller oil production increase than was required in 2011 to keep global energy demand and supply in balance. And government spending in the GCC will continue to support growth in the non-oil sector.
