The Middle East Economy

The volume of trade between Turkey and the US is increasing, as the two countries strive to improve commercial ties despite occasional strains in political and military relations. US officials and private sector groups are promoting Turkey to American businesses as a growing economy in a strategic location with a massive labour force.

While the world economy is still plagued by uncertainty, Kuwait’s continues to grow, supporting the country’s medium-term development plans. In September, the International Monetary Fund (IMF) lowered its forecast for 2011 global growth to 4%, taking into account the eurozone crisis and US debt, but announced that it expected 5.7% growth in Kuwait.

Turkey’s second-quarter GDP growth, released by the central bank on September 11, surprised on the up side, with an 8.8% year-on-year (y-o-y) rise that easily surpassed the 6.4% expected by the market. Growth is down from the 11.6% posted in the first quarter, however, and a looming slowdown in the eurozone has many concerned about Turkey’s exposure.

Oman’s economy has become more competitive in the past 12 months, according to a recent report, and is steadily making the transition from having an efficiency-driven economic base to an innovation-powered one, a process that will gain further momentum thanks to increased government budget outlays.

Qatar looks set to retain its position as the world’s fastest-growing economy this year, with the country’s core sectors performing strongly and diversification continuing apace. While many economies worldwide are still sluggish, or face the prospect of slipping back into recession, Qatar is expected to see 21% real growth in 2011, according to a recent report by Doha-based financial institution QNB Capital.

Saudi Arabia’s economy looks set for a period of sustained growth, with oil revenues remaining high, non-hydrocarbons exports on the rise and the effects of a massive investment programme by the state starting to kick in.