GDP of GCC economies to grow 5.2% in 2010: IMF

Gulf Cooperation Council member countries will see their gross domestic product grow at 5.2 per cent in 2010 on the back of rising oil revenues, the International Monetary Fund has said.

According to the IMF, the GCC member countries such as Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain and Oman registered real GDP growth of 6.4 per cent in 2008.

"For the recovery to be sustainable, policy stimulus-based demand has to be replaced with private demand, in households," said IMF Middle East and Central Asia director Masood Ahmed.

A key recovery risk will be the pace of unwinding public stimulus programmes as well as public debt management, Ahmed said, adding that the price of public debt, as governments run fiscal deficits, and the role of central banks are key issues going forward. 

GCC countries will post fiscal surpluses of 5.3 per cent of GDP in 2009, down from 27.4 per cent last year, the IMF said.

Speaking to mediapersons Ahmed said the Gulf countries should continue public spending to stimulate their economies, despite a slump in oil income and unwind their stimulus programmes slowly.

"Our message will be, going forward, continue with your programme of public spending and don't cut back in 2009," he said."

The UAE has made available $32.67 billion (120 billion dirhams) for local banks since the onset of the crisis and is contemplating another tranche of cash injection.