GCC Economies to Grow at 5.3% 

(MENAFN - Qatar News Agency) The Gulf Cooperation Council (GCC) member economies are expected to post an average growth rate of 5.3 percent in 2012 while the pace of the global economic recovery remains hesitant and uncertain against the backdrop of mixed indicators, Gulf Investment Corporation (GIC) said in its monthly economic report titled "Global Economic Recovery Remains Hesitant".

It said firm oil prices and continued fiscal expansionary policies have supported robust growth in the GCC during 2012, reported Saudi Gazette Monday.

According to the EIU, real GDP growth in 2012 is expected to reach 5.5 percent for Kuwait, 5.0 percent for Oman, 7.0 percent in Qatar and 5.5 percent for Saudi Arabia.

Continuing political tensions in Bahrain is likely to constrain growth to 3.5 percent. The IMF has recently revised the growth forecast of the UAE to 3.5 percent in 2012. More than 25 percent of the GCC imports originate from the EU and historically the GCC has recorded large deficits with Europe.
However, the weakening of the euro is expected to soften the trade deficit and also reduce imported inflation.

Overall, inflation is expected to remain contained in the GCC region, with Bahrain and Qatar forecast to record 2012 rates of 3.3 percent and 2.1 percent respectively.

While UAE is expected to record around 2.4 percent, it is expected to be marginally higher in Kuwait and Saudi Arabia, at 4.3 percent and at 5.0 percent, due to the faster and more widespread wage and salary increases which has triggered substantial increase in food prices and rents.