Gulf economies to survive global slump

A Reuters poll of analysts showed that whilst economic growth is likely to slow in most of the Gulf's oil exporters next year, governments will still be able to spend and this will enable them to counter the impact of any global economic slowdown. Gross domestic product (GDP) of Saudi Arabia, the biggest Arab economy and the world's top oil exporter, is expected to expand 4% percent in 2012, down from an estimated 6.7% this year, according to the median forecast in a global poll of 18 analysts. n the United Arab Emirates, the second largest Arab economy, GDP growth is expected to slow to 3.1 percent next year from 3.9 percent in 2011, according to the latest poll, conducted in the past two weeks. Three months ago, analysts predicted 3.8 percent growth next year.

Growth is slowest in the tiny kingdom of Bahrain, the only GCC state to suffer major social unrest this year. But its economy has been recovering gradually since the second quarter of 2011 and is projected to accelerate to 3.0 percent next year.

The euro zone debt crisis and signs of slowing growth in China are factors that will affect the outlook for the Gulf. However, in contrast to the rest of the world, the Gulf states will still have enough fiscal resources they can tap to stimulate their economies to maintain growth.