Bahrain’s positive growth is praisedMonday, October 26, 2009
MANAMA: Bahrain’s two per cent gross domestic product (GDP) growth this year is a sign of good things to come, said a global financial expert yesterday.
Standard Chartered Bank Middle East North Africa and Pakistan global markets regional head Marios Maratheftis said the positive growth, though it was low compared with the 7pc in the previous year, was very creditable in view of the other major Gulf economies recording negative growth.
Speaking to the media at the Ritz-Carlton Bahrain, Hotel and Spa, the Dubai-based Mr Maratheftis said Bahrain’s GDP will grow by 3pc or more next year and will contribute significantly to the GCC region, which is slowly emerging as a major player in the global economic scenario.
“At a time when UAE, Saudi Arabia and Kuwait were reeling, Bahrain stood out,” he said.
“This resilience of Bahrain will ensure it will emerge stronger as the world slowly emerges from the recession.”
Mr Maratheftis, who was briefing the media on the different dynamics of the economic revival, said though the US is already leading the upturn, it was anticipated the recovery would not be a very quick one. “The recovery is certainly happening, though at a slower pace than one would expect it to be.”
His comments came weeks after the International Monetary Fund (IMF) announced Gulf economies will grow 5.2pc next year as oil prices rise, credit markets improve and the property industry stabilises.
The growth forecast for Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain and Oman is based on an average oil price of $76.5 a barrel next year.
Mr Maratheftis said GCC states should however; continue with public spending next year because no one was out of the woods yet.
He said emerging markets will be the engine of growth for global recovery and the region will benefit from an increasing reliance on Asia – particularly India and China – for expansion.
Speaking on the GCC monetary union, he said the currency, though it was not ‘common’ anymore with the UAE and Oman walking out, would be good for the region.
“A GCC central bank that would come into existence should however have equal voting rights for all the members otherwise it would not be able to function.”
He said the currency would also be popular in the West since it would create a natural hedge against the oil price rise and will increase the confidence and largely benefit the financial markets.
“It will also promote intra-regional trade, which is quite low among the Gulf countries,” he said.
