Saudi Arabia will emerge as the second fastest growing G20 country after China this year, while Gulf economies will outpace global and emerging growth, Barclays Capital research revealed.
The jury is still out whether the new stimulus packages and programs announced by the US Federal Reserve, the European Central Bank and the Bank of Japan will boost the global economy.
“While the timing of a global growth rebound remains uncertain, the tail risks for investors, in particular those related to the euro area, have been reduced,” said BarCap’s Christian Keller. “This improves the outlook for risky assets and should support flows into emerging market assets.”
Saudi Arabia’s performance among G20 nations will only be bettered by China, the world’s second largest economy
Saudi Arabia’s performance among G20 nations will only be bettered by China, the world’s second largest economy. For all of China’s economic woes, the country will still post 7.5 percent growth this year and 7.6 percent in 2013.
“Our expectation is for China’s growth to stabilize within a 7-8 percent range, which is where we see its new potential.
However, our current forecasts for 7.5 percent growth in 2012 and 7.6 percent in 2013 do require some pickup in momentum in Q4 and a modest recovery in 2013,” said Barclays.
A pick up in Asia is important for Gulf oil exporters that depend heavily on growth among Eastern nations
A pick up in Asia is important for Gulf oil exporters that depend heavily on growth among Eastern nations. Barclays Capital believed the global economy will grow at 3.1 percent this year and 3.5 percent in 2013, with the eurozone contracting by -0.5 percent and growing a paltry 0.3 percent next year.
BarCap’s figures were below the International Monetary Fund’s 3.5 percent growth projection for this year for the global economy and a relatively healthy 4.1 percent in 2013.
And while it forecast eurozone will contract 0.3 percent this year, it saw a near 0.9 percent growth in 2013.
Gulf economies will be outpace both global and emerging economies, rising 5.5% this year
And while the global economy will stutter, Gulf economies will be outpace both global and emerging economies, rising 5.5 percent this year, compared to 5.1 percent by emerging markets, BarCap estimates.
Qatar will lead the way among major economies, rising a staggering 11.5% this year
Qatar will lead the way among major economies, rising a staggering 11.5 percent this year. But it will be Saudi Arabia, the Middle East’s largest economy, and a G20 nation, that will clock growth of 6.2 percent this year, followed by a robust 5.1 percent in 2013.
“Emerging market corporates look cheap versus sovereigns; low-investment grade and high speculative grade credits look particularly attractive,” noted BarCap analysts. “We continue to like Dubai Inc. and highlight the Korea and India complex, Chinese property and Brazil and Chile investment grade among our preferred sectors.”
SG/QJM
September 27
