Nearly 50% of the MENA region’s economic growth will come from the six GCC countries, (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), according to analysis shared by information and analytics firm IHS.
More than $1 trillion of investments are needed by 2030 to meet demand for gas and electricity in the Middle East and North Africa and demand for natural gas in the GCC countries will rise more than 50% by 2030, from 256 billion cubic metres in 2011 to 400 bcm in 2030. At the same time, demand for oil from the GCC will also grow by more than 50% by 2030, from around 4 million barrels per day to more than 6.2 mbd, according to IHS.
“Recent political events in Egypt, and geopolitical developments in Iran and emerging energy players are unlikely to change the need for investment in the Middle East and North Africa. On the contrary, leaders in the region want to keep the oil and gas flowing, keep the lights on and their economies growing. Their ability to make these vital investments depends on their ability to diversify their economies and adapt to the global energy revolutions,” said Leila Benali, director, IHS Energy.
GCC countries are forecast to deliver nearly 50% of the total GDP for all the Middle East and North Africa by 2015 – $1.8 trillion of economic activity. Today the GCC delivers 60% ($1.6 trillion) of all economic activity in the Middle East. The GCC could grow annually by 4% in real terms through to 2030. In the near term, GCC GDP will grow by 4.3% in 2014 and 4.5 percent in 2015, according to IHS.
Total trade (or merchandise trade) between the GCC and China grew to $155 billion in 2012, which is 16 times larger than trade in 2001. Trade between the GCC and India rose 29 times to $159 billion in 2012.
“The Middle East has looked to Asia in search of economic growth, taking advantage of its geostrategic position between East and West. Saudi Arabia, the United Arab Emirates and Kuwait will want to export more crude oil to Asia, forging closer links with Asia as they respond to the revival of US oil production. The energy-thirsty economies of China and India have become key trade partners for the GCC and wider Middle East, looking to Iran and Iraq for energy opportunities as well. But, future growth depends on how quickly the GCC countries can diversify and embrace Asia. They have been quick so far. We will see how it continues,” said Bryan Plamondon, senior economist, IHS Global Insight.
“In addition to oil and gas, exports of petrochemicals, plastics and other goods to and from the GCC and Asia will increase in growing trade between the two regions in the next 10 years,” Plamondon added. “Development projects in the Gulf will spur the need for imports of machinery and equipment, transport, and infrastructure goods, opening the door for greater trade with Asian countries.”
