The UAE’s economy is forecast to weigh on GDP growth in the GCC this year and next, according to latest figures published by Bank of America Merrill Lynch.
In its Global Economic Weekly Report, analysts said the UAE’s economy would see sluggish growth of just one percent in 2010, with growth forecast at two percent in 2011.
The report said it would be the worst performing economy in the GCC region for both years although better than the 1.4 percent contraction it believes happened in 2009.
The UAE, and Dubai in particular, was hard hit by the impact of the global economic crisis with Dubai World announcing in November that it was rescheduling $24bn worth of debt.
Bank of America Merrill Lynch’s latest report said Qatar’s economy would be the region’s top performer in the next two years.
GDP growth of 11.3 percent and 9.6 percent are forecast by its analysts for the world’s largest exporter of liquefied natural gas (LNG) which is also aiming to host the FIFA World Cup in 2022.
Oman is seen as the second best performing country in 2010 with 4.6 percent GDP growth, improving to 4.8 percent growth next year.
Saudi Arabia, which launched a $400 billion five-year development plan in 2008, is seen growing by 3.2 percent this year and 3.9 percent in 2011.
BoA Merrill Lynch estimated that Kuwait’s economy suffered most in the region, contracting 2.2 percent, but said it would rebound with 2.5 percent GDP growth in 2010, improving to 3.1 percent in 2011.
Rounding off prospects for GCC economies, the report said Bahrain would see 2.4 and 2.8 percent growth.
In May, the Internatinal Monetary Fund (IMF) said economic prospects for the the Middle East and North Africa region would improve this year with the resumption of capital inflows and rising crude oil prices.
But it added that stress in the banking and financial sectors along with slow credit activity were continuing to weigh on the rebound.
The IMF said that the region’s gross domestic product should expand by 4.2 percent this year after 2.3 percent growth in 2009, but still short of 5.7 percent seen ahead of the 2008 global credit crunch. It forecast 4.6 percent growth in 2011