MENA FDI inflows in 2008 multiplied 25 times when compared against the average FDI inflows during the 1990’s says a report by Arabia Monitor on MENA Outlook. It further adds that oil at US$50 per barrel will earn the GCC a cumulative US$4.7 trillion in the next 10 years or 2.5x cumulative earnings of the last 14 years.
The report discusses each of the 16 countries classified as MENA and provides a brief outlook of global GDP; expecting GDP growth of 3.1% during 2010. It also suggests a lower long-term growth rate post financial crisis given structural weaknesses and lower government revenues in mature economies perhaps leading to another cycle of asset value correction.
The report specifically highlights the importance of Emerging Market economies. Emerging markets are expected to outperform Rest of the World on various parameters including GDP growth, imports and exports of goods and services and current account surpluses, says the report.
With its specific focus on MENA, the report suggests oil related industries and associated revenues will form an integral part of any future surplus. Allocating/ investing surplus funds in the right sectors and assets will be critical for the long-term sustainability of the region and emergence of a diverse MENA economy. With huge sovereign wealth backing in the key economies of the region, resources are expected to be deployed to support job creation; domestic economic development priorities and infrastructure spend.
The report is an interesting read for economists and analysts looking for historical data and future projections on various macroeconomic, financial and demographic indicators for each of the 16 countries in the MENA region.
Source: Report by Arabia Monitor – The Decade MENA came to be, MENA Outlook Jan 2010