The Gulf Cooperation Council (GCC) economy, which is growing at around 5-6 per cent, is almost as strong as that of the Indian economy, industry experts have said.
"The GCC nominal GDP is 1.5 trillion; India's nominal GDP is 1.8 trillion, which means that as a very small economic block, the GCC has an economy size that is almost equal to India or Russia for that matter.
"This is going to be a very powerful driver and engine not only for the region but also for a lot of assets to find their play through this infrastructure," it was concluded during a panel discussion on the economic forecast for 2013 yesterday.
During the discussions attended by Simon Williams, Chief Economist at HSBC, Chirag Shah, Head of Strategy and Corporate Planning at DIFC Authority, and Yousef Bazian, Head of Corporate Finance at PwC in the Middle East, a consensus
emerged that the Gulf region has achieved considerable non-oil economic growth.
Williams said there are two distinct stories at play. In the GCC, and perhaps a few other places in the greater MENA, the oil-driven story has governments spending aggressively and creating new fiscal stimulus.
"When this is then compared to the bankrupt economies of the West and the slow economies of much of Eastern Asia, the GCC region has a much better outlook than the rest of the world," he said.
This sentiment was echoed by Chirag Shah, who used the image of concentric circles - with Dubai at the centre Ė to describe the current economic status of the world, stating that "the economic outlook seemed to worsen the further from
the centre you moved".
He said that the US and Europe were struggling fiscally and not a lot of growth could be expected from these markets. In many of the MENA countries that have been undergoing transitions it has taken a lot longer than expected to come back on the growth track.
But as you come closer to the GCC the picture changes. In the past three years the GCC has created one trillion US dollars in current account surplus. This is a vast amount of money that will be going into government spending, infrastructure creation, or getting managed through financial assets.
"It is a extremely large surplus that has been created in a very small geographic space and for a very small population as well," he said.