It is expected that the GCC countries will experience an economic growth rate of 3.4 per cent in 2015 and 3.7 per cent in 2016, while the UAE economy is protected against lower oil prices, reveals a report by the Coface Group.
GCC, at present, owns an equivalent of 30 per cent of the oil reserves in the world, with Saudi Arabia coming in at the top with 15.7 per cent, followed by Kuwait at roughly six per cent, then UAE at 5.8 per cent. Oil production by GCC countries in the last year amounted to 28.6 million barrels per day, equivalent to 32.3 per cent of world production, Al Bayan reports.
The Coface Group report says that although falling oil prices affect all GCC countries, there are variations in the response of the states and their handling of this crisis. Falling oil prices have left the biggest impact on Oman and Bahrain, while its impact on Saudi Arabia, the UAE and Kuwait remain lesser than on their counterparts.
The report expects the GCC to witness economic growth of 3.4 per cent in 2015 and 3.7 per cent in 2016. These rates are considered high compared with other emerging markets though they remain lower than the growth rate in the region, which amounted to 5.8 per cent between 2000 and 2011.
The UAE economy is one of the most diversified economies in the Gulf, making it capable of absorbing the fall in oil prices.
The revenues of oil and gas constitute 25 per cent of the nation’s GDP and 20 per cent of its export earnings.
Saudi Arabia, which has 80 per cent of its export earnings and roughly 85 per cent of its budget revenues come from the oil sector, is speeding up the process of diversifying its economy, Coface Group notes.
The report adds that many countries are making an effort to cooperate in the implementation of effective economic plans such as Saudi Arabia with its strategy for 2025, Oman’s 2020 vision, the UAE’s 2021 vision and Bahrain’s 2030 vision.