|
Dubai: Gulf Arab states, which pump almost a quarter of the world's oil, face the prospect of higher prices as $100 crude floods the region with petrodollars, Standard Chartered said.
Saudi Arabia, the UAE and four other Gulf countries produce more than 15 million barrels of oil a day, earning $1.5 billion at current prices. Regional governments are investing these record surpluses in development projects to diversify their economies. This has also strained supply of goods and created shortages, most notably in housing.
Greater pressure
High oil prices will result in more money flowing into the region and "translate into greater pressure on inflation and on goods and asset prices,'' Marios Maratheftis, Standard Chartered's head of research for the Middle East, said yesterday.
Analysts including Caroline Grady, a London-based economist at Deutsche Bank, have raised their 2008 inflation forecasts after local currencies were led lower against the euro by the weakening dollar and housing shortages persisted.
UAE inflation accelerated to 9.8 per cent in 2007 from 9.3 per cent in 2006, according to the median forecast of seven econ-omists surveyed by Bloom-berg in December.
Oil revenues of the six Gulf Arab countries, that also includes Kuwait, Qatar, Bahrain and Oman, will probably rise 10 per cent in 2008 to $440 billion if the price of Dubai crude, a regional benchmark, averages $75 a barrel.
|
