The Gulf Cooperation Council (GCC) countries will continue to invest heavily in infrastructure and diversify their economies, thus boosting non-oil GDP growth, Qatar National Bank (QNB) said in a report.
The study also noted that the MENA region is expected to grow between 3.5 percent and 4 percent this year and 4.5 percent to 5 percent in 2014, notwithstanding significant headwinds from the global economy and domestic political uncertainty in a number of countries in the region.
The QNB Group said in the report that weaker oil and gas prices and flat production levels are likely to drive down the contribution to growth of the hydrocarbon sector in GCC countries, while the non-oil sector will continue to expand at a brisk pace driven by strong private sector demand and higher public investment.
The rest of the MENA region is expected to strengthen its economic performance over the next two years, driven by a gradual improvement of the global economy, higher investment, and a recovery of domestic demand.
Significant downside risks, however, remain to this growth outlook, arising from a possible downturn to the global economy and domestic political uncertainty.
The strong growth outlook in the MENA region is likely to be associated with lower inflation and improved fiscal positions in the oil importing countries.
Lower oil and gas prices should also reduce the current account imbalances in the region on average.
Overall, the MENA growth scenario suggests good investment opportunities for global investors in the region, QNB said.
IMF forecast earlier that the GCC countries sprinted ahead (6 percent real GDP growth), led by Qatar and Saudi Arabia, while oil importers lagged behind (1.9 percent real GDP growth), reflecting low global demand for their exports and political uncertainty.
The GCC countries also experienced low inflation (2.4 percent), while the rest of the MENA region faced significant price increases (8.9 percent).
In addition, GCC fiscal and current account balances continued to register large surpluses, driven by higher oil and gas prices.
This story was originally published in the Saudi Gazette.