The current account surplus of the GCC countries is expected to surge 71 percent to $279 billion this year from $163 billion as the region's economy would record more than seven percent growth in 2011, the International Monetary Fund (IMF) said Wednesday. “In 2011, the oil exporters' combined external current account balance in the Middle East and North Africa region is expected to increase from $202 billion to $334 billion (excluding Libya), and from $ 163 billion to $ 279 billion for the GCC,” the IMF said in its latest assessment. The IMF said the decision by Saudi Arabia and its Gulf neighbors to boost oil output to make up for supplies that dried up due to Libya civil war proved essential in maintaining global energy market stability. In 2012, oil-exporting countries are expected to grow 3.9 percent. For the region as a whole, the IMF forecast economic growth of 3.7 percent in 2012. The report noted that the immediate downside risks faced by oil-exporting nations include the impact of a sharp slowdown in Europe and the US, saying that global oil demand could shrink significantly, possibly resulting in a drop in oil prices. The overall growth in the MENA region is projected at 3.9 percent in 2011, down from 4.4 percent in 2010. Oil-exporting countries, excluding Libya, are forecast to expand by 4.9 percent in 2011 due to higher oil prices and oil production, before moderating in 2012, it said. The non-oil exporters economies in the Middle East and North Africa region, however, are likely to face major headwinds in 2012 amid darkening uncertainty from the regional unrest and a possible slump in the global economy, the IMF it said in its Regional Economic Outlook for the Middle East and Central Asia. It added that at current projected oil prices and output levels, revenue gains will more than offset the high levels of public spending. IMF cut its economic growth forecast for the Mideast's oil importing countries to just 1.9 percent this year, down from an earlier IMF forecast of 2.3 percent and well below the more than four percent growth in 2010. Growth among the region's oil importers - Afghanistan, Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Syria, and Tunisia - will register just under two percent in 2011, the IMF said. While oil exporters experience a pickup in growth in 2011 on the back of higher oil prices, oil importers see a dramatic downturn as the region faces heightened regional and global uncertainty, said Masood Ahmed, Director of the IMF's Middle East and Central Asia Department. “For the GCC, who have stepped up production temporarily in response to higher oil prices and shortfalls in production from Libya, growth continues to be projected at more than seven percent,” Ahmed said. “Several countries announced spending programs early in the year covering a wide spectrum of measures, such as subsidies, wages, and capital expenditure” on account of high oil prices, Ahmed added. The IMF noted though that “fiscal vulnerability has increased as a consequence of substantial spending packages that have been implemented over the past three years. In particular, fiscal break-even oil prices - the price levels that ensure that fiscal accounts are in balance at the given level of spending - have been trending upward in most countries and are gradually approaching the actual spot market price.”
