Arab GDP up to 2.9 percent in 2016 driven by oil price hike

The Arab Gross Domestic Product 2016 increased to 2.9 percent from 2.5 percent in 2015 , said a report by the Arab Investment & Export Credit Guarantee Corporation, Daman, which attributed the growth to a set of economic reforms embraced by some Arab countries and the relative rise in oil prices.

The report, a copy which was obtained by WAM, highlighted the IMF's forecasts that Arab GDP will be up to 3 percent this year before rising to 3.7 percent in 2018.

Per capita income retreated from US$7,324 on average in 2015 to $7,231 in 2016 driven by 4.9 percent population growth, said the report, stating that inflation rates were back on the rise to 5.6 percent against 4.8 percent in 2015 following the price hike in a number of staple commodities, specially energy and food articles as well as other goods that were impacted by governments slashing subsidy in a number of countries.

According to the report, FDI inflows to the Arab world declined by 10 percent to $40 billion in 2015, accounting for only 2.3 percent of total world FDI, estimated at $1.76 trillion and 5.2 percent of FDI in developing countries which stand at $765 billion in 2015.

Intra-Arab trade traffic declined by 3.8 percent to $1971 billion in 2016 and is projected according to the report to get back to the growth track and rise by 8.8 percent to $2144 billion in 2017.

Arab exports of commodities and services are down by 5.6 percent to 938 billion in 2016 and are expected to spiral by $118 billion, namely 12.6 percent, to $1056 billion in 2017 backed by the anticipated price hike in oil products which account for 85 percent of the region's goods exports.

Arab goods and services imports declined by 2.1 percent to $1033 billion in 2016 and are expected to get back on the rise by 5.4 percent to $1088 billion in 2017.

Total Arab foreign debts rose by $963 billion to $1032 billion in 2016 while foreign reserves are down to $1060 billion and expected to go further down to $1000 billion in 2017.

On the global level, the report indicated that world economy maintained its stability but slightly declined according to IMF estimates in January which indicted a decline in Global GDP by 3.1 percent against 3.2 percent in 2015 as a result of several factors, primarily the falling growth rates in advanced nation from 2.1 percent in 2015 to 1.6 percent in 2016, with emerging markets maintaining stable growth rates and Asian nations, specially China, posting comparatively less growth.