Emirates NBD’s chief economist said on Monday that the GCC would see cautious rather than runaway growth in 2010.
GCC economies are set to see an average growth of between 3-4 percent in 2010 compared to last year, senior executives at Emirates NBD, the region’s largest bank by asset size, said on Monday.
The bank predicted real GDP growth during this year of 2.5 percent for the UAE, 3.0 percent for Saudi Arabia, 1.5 percent for Kuwait, 3.0 percent for Oman, 2.5% for Bahrain, and 10.0% for Qatar.
By comparison, Emirates NBD said that more traditional markets would stagnate, with GDP growth for the Eurozone predicted at 1.0 percent, for the UK at 0.5 percent and Japan at 1.0 percent.
Growth was predicted at 2.5 percent for the US and a still-strong 10.0 percent for China.
“This will be a year of rehabilitation,” said Tim Fox, chief economist of Emirates NBD. “But it’s important to retain a degree of reality; there won’t be runaway growth and it will be relatively cautious.”
Emirates NBD said that it would be advising clients to have a strong balance of assets, and indicated that there were likely to be more mergers and acquisitions during the course of the year, with healthcare a notable possibility in this field.
Fox added that some of the reasons for its bullish forecast were the strong indicators emanating from regional economies about their own predictions this year. In the last week or so, Qatar has estimated its own growth at 11 percent, with Oman coming in at 3.7 percent.
“Although the global recovery is well under way, it is unlikely that economies will return to their trend growth rates before 2011,” Fox said.
“The next 12 months will likely see a continued recovery of the US dollar. However, investors will have to remain wary of rising bond yields and generally volatile trends in emerging markets. ”