Forex

Gulf countries are expected to increase their international reserves substantially in 2010 as oil prices edge up, the International Monetary Fund (IMF) said in its regional economic outlook on Sunday.
Oil exporters in the Middle East and North Africa region are expected to increase their international reserve positions by over $100 billion (Dh367 billion) in 2010 as oil prices rebound, the IMF report said.
Turmoil
“The huge reserves built up by the Gulf oil exporters helped them to weather the impact of global financial turmoil better. The rebuilding of their international reserve positions as a result of the rising oil prices would help governments in the region maintain public spending, which will help them to mitigate the impact of global financial turmoil on their economies,” said Masoud Ahmad, Director of the Middle East and Central Asia Department of IMF.
The oil exporting Gulf economies are projected to grow 5.2 per cent in 2010 against a projected real growth of 0.7 per cent in their combined gross domestic product in 2009. While the oil-based GDP is expected to grow 5.5 per cent, the non-oil GDP is 4.4 per cent as inflation is projected at 3.8 per cent in 2010. The forecast for next year is based on an average oil price of $76.50 a barrel in 2010, the IMF said yesterday.

The Gulf countries faced economic contractions this year after crude prices plummeted from last year’s July peak of $147.27. The IMF urged the states to develop local bond markets to ease reliance on bank financing. While the banks across the region do not face any serious systemic risks, the IMF noted that Islamic banks are better-positioned to withstand credit shocks.