Spot gold was slightly down at $2,335.13 per gram on Monday
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The region will sustain the same level of growth in net foreign assets in 2009 and 2010 to $2.8 trillion and $3.5 trillion respectively, as record oil revenues continue to propel current account surplus to new highs, according to analysts at the Saudi American Bank (Samba).
The cumulative foreign assets of the region is set to record a threefold growth by 2010 compared to $1.07 trillion in 2001 as GCC's current account surplus is set to shoot up by 20 times in the same period — from $31.5 billion to $647.5 billion, the forecast said.
As the regional economy grows past $1 trillion in nominal terms, in 2008 GCC's current account surplus is on track to post a steep growth from $188.3 trillion in 2007 to reach $463.4 billion. It will reach $554.3 billion in 2009, and $647.5 billion in 2010, the forecast said.
In tandem with the economic buoyancy, the average fiscal surplus is expected to reach 35 per cent of GDP, while the aggregate current account surplus will near 40 per cent of GCC's GDP which is estimated to reach $1.152 trillion in 2008, it said. The next two years will also see oil income further boosting GCC current account surplus in proportion to the GDP, which is expected to reach $1.33 trillion in 2009 and $1.51 trillion in 2010.
Economists at Standard and Poor's said in study that the six-member GCC was on course to record a cumulative current account surplus of almost $1 trillion by the end of 2008, allowing states to build up substantial government assets, mainly through their sovereign wealth funds.
Since 2002, the cumulative current account surplus of the GCC countries, flush with cash from record oil prices, which have almost tripled since early 2007, is estimated to have reached almost $1 trillion in 2008, the ratings agency has said in a report.
Oil prices have trebled since 2007, resulting in a a spectacular economic boom for the region that holds as much as 29 per cent of the world's proven oil reserves and one-fifth of the world's proven gas reserves, the report said.
Samba economists said GCC's current run of high oil prices will push its GCC economy past that of South Korea and put it on a par with India.
"Real GDP growth, which is expected to reach 8.2 per cent in 2008, has tended to fluctuate in line with oil output. The contribution of the non-oil sector has been more vigorous and more stable, and has been the engine of the current boom," they said.
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