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Gulf countries to earn $1 bln surplus a day from oil

Gulf countries are likely to earn export surplus of $1 billion (about 3.67 billion dirham) a day if the oil prices remain above $135 (about 496 dirham) a barrel, according Global banking major Merrill Lynch.

Analysts estimate that a $10 increase in the oil price could boost GCC export revenues by $55 billion a year. The bank feels that despite the global financial turmoil the Gulf countries offer a safe haven for investments as their surplus from oil windfall mounts. The region’s non-oil growth accounts for 80% of GDP growth and 70% of the $2 trillion investments that target improvements in infrastructure.

According to Merrill, the fiscal prudence of Gulf states makes it a solid macro story, which cushions the storms in global markets and paints a bright medium-term picture. Although the oil surplus will boost liquidity in the short to medium term, it will also result in higher inflation combined with higher asset prices giving way for asset bubbles in the medium term, it said. (Gulfnews)