‘GCC growth momentum to lure foreign fund inflows’

22/04/2012 08:00 AST

The GCC nominal GDP is expected to grow by 4% in 2012, driven mainly by Qatar, Saudi Arabia and UAE, Doha Bank Group CEO R Seetharaman has said.

Qatar’s aggregate GDP growth in 2012-2016 is expected to average 6.9% with hydrocarbon GDP growth accounting for 4.4% and non-hydrocarbon GDP 9.1%. Services will be one of the major drivers of the economy. Qatar’s investment pattern will reflect the decline in hydrocarbon capital spending. Qatar’s GDP in 2011-2016 is expected to be about QR820bn. Gross investment is seen averaging 25% of the GDP in the same period, he said.

The positive growth in the Gulf Co-operation Council region with huge project developments will require massive inflows of funds from overseas investors.

Saudi Arabia’s ninth five-year plan of 2009-14 focuses on education; social, health, and economic resources; transportation and communication as well as municipal and housing services. Oman’s 2011-15 plan lays emphasis on infrastructure with recent fiscal policies focusing on education, health and civil development expenditure. Dubai is introducing a master plan for urban development that is expected to create 950,000 jobs by 2020.

In Saudi major non-hydrocarbon projects include King Abdullah Economic City and Jizan Economic City. The Jebel Ali area in Dubai is witnessing key developments. Major projects in Oman include Duqm New town and a deep water gas line worth $24bn. Kuwait’s crucial development initiatives include “City of Silk”.

Qatar is developing an investor-friendly regime, Seetharaman said. Corporate tax for non–Qatari companies is now capped at 10% unlike the earlier variable slabs up to 35%.

The initiatives brought about by the Qatar Exchange in recent years such as the Universal Trading Platform in 2010 and Secure Financial Transaction Infrastructure in 2011 have attracted a diverse investor base and put the Qatari bourse on par with major global exchanges, he said. The P/E and P/B of the QE is currently 8.92 and 1.7 respectively and it appears attractive when compared to other global exchanges.

The 2011 Global Competitiveness Index report from the World Economic Forum placed Qatar at 14th position out a total of 142 nations covered.

The tax incentives, initiatives from the Qatar exchange, competitiveness of Qatar economy and the attractive price earnings will encourage global investors to invest in Qatar, Seetharaman said.

Gulf Times