The Dubai Chamber of Commerce and Industry (DCCI) has said that the Gulf Cooperation Council (GCC) countries are poised for strong economic growth this year, despite the heightened regional geopolitical risks.

The GCC countries combined are estimated to grow 5.4 per cent in 2012, DCCI added.

Quoting the latest International Monetary Fund (IMF) numbers, combined with data from national authorities, a DCCI study has said that the UAE will see year-on-year GDP growth of 4.5 per cent in 2012.

Kuwait, Oman and Bahrain are likely to record growth of 4.9 per cent, 4 per cent and 3 per cent, respectively. Besides, Saudi Arabia and Qatar will expand at 5.1 per cent and 9.4 per cent.

The study said that the upward trajectory of oil prices should strengthen the fiscal and current account balances of GCC countries.

“In Saudi Arabia, Kuwait and UAE, larger fiscal surpluses and greater accumulation of reserves are projected. As such, for the GCC as a whole, IMF projects that fiscal and current account surpluses will stand at 13.1 per cent and 22.2 per cent of GDP in 2012, respectively,” the DCCI said.

The study further states that regional growth is supported by its ongoing expansionary fiscal policies.

Higher allocations to current public spending, notably on wages such as those recently announced in the UAE and Kuwait, will boost domestic demand and non-hydrocarbon growth.

In fact, non-hydrocarbon growth reached a record high in Saudi Arabia in 2011, increasing by 7.8 per cent, while it is projected to remain at high levels in 2012 with 5.3 per cent increase.

Similar trends are projected to take place in Kuwait and Oman, where fiscal spending has been on a rise. In UAE, the upward trajectory of the non-hydrocarbon sector remains elevated for 2012 and is projected to increase by 3.9 per cent, year-on-year, from 3.3 per cent in 2011 and 2.1 per cent in 2010.

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