Gulf surplus likely to hit $1tr as world consumes more fuel

Abu Dhabi: The combined current account surplus of Middle East oil-exporting countries may touch $1 trillion (Dh3.67 trillion) in the next five years, spurred by a rise in global fuel demand and higher prices, an International Monetary Fund (IMF) official said on Monday.

"Over the next five years, we anticipate that the surplus in their current account will be $600 billion to $1 trillion. Some of it will be managed by the sovereign wealth funds," Masoud Ahmad, director for the IMF's Middle East and Central Asia department, told reporters on the sidelines of an industry conference.

Constructive

"Our view has been that sovereign wealth funds are constructive, long-term investors in the global markets," Ahmad said.

He said the current account surplus of the region's oil exporters would increase in 2010 as international oil prices rise, and added that their combined surplus fell by $50 billion this year from around $400 billion in 2008 due to the slump in oil prices.

International oil prices are rebounding from lows of $32.40 a barrel last December.

Demand for oil dropped as the global economic downturn battered world economies.

Oil prices peaked on July 11 last year when a barrel of crude traded at $147.27 on the New York Mercantile Exchange.

Currently, oil prices on international markets are hovering around $75-$78 a barrel.

Separately, Ahmad said the world economy will shrink one per cent this year, but will rebound next year.

"Next year, we are looking at 3 per cent growth in the world economy led by growth in emerging markets," Ahmad said.

He added that growth in developed markets such as the US would be "weak and sluggish."

"If you compare 2010 and possibly even 2011 to the period of 2007 and 2008, the overall economic recovery will be pretty weak," he added.

The IMF estimates the non-oil economy of the Middle East region and the Gulf Cooperation Council (GCC) countries will grow by 3 per cent in 2009 and 4.5 per cent in 2010, Ahmad said.