Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

GCC capital expenditure expected to rise in 2013  Join our daily free Newsletter

MENAFN - Arab News - 29/09/2013
No. of Ratings : 0
Add to Mixx!


(MENAFN - Arab News) Gulf Cooperation Council (GCC) governments are investing heavily in infrastructure, and spent an estimated 112 billion on capital projects in 2012, according to their budget outturns. Not only is this high in absolute terms, it also represented 7.1 percent of the GCC region's GDP, up from just 4.2 percent in 2004.

In 2013, QNB Group forecasts that GCC capital expenditure will rise further to 8.2 percent as more projects get underway. This will be the second highest share on record (after 2009 which was distorted because low oil prices that year reduced regional GDP by 19 percent , but most capital projects continued on schedule). Rail schemes such as the Doha, Riyadh and Abu Dhabi metros and the high speed inter-city rail network under construction in Saudi Arabia, will all boost GCC capital spending going forward.

Effective public capital expenditure in the GCC is even larger than the budget data suggests. This is because government agencies sometimes spend off budget and because of the usage of public private partnerships for some megaprojects. These partnerships are particularly used for power stations, such as the Al-Zour North plant recently contracted in Kuwait, and the private sector finances construction under a long term service agreement with the state. Although the private sector finances the capital expenditure, it is originated by the state and only made possible by virtue of the public-private contract.

In addition, a broad framework to guide capital investment has been provided by vision statements with a time horizon of decades, such as the Abu Dhabi Economic Vision 2030, which have been developed by most GCC states. Increasingly they are also utilising more detailed medium-term plans, such as the #Qatar National Development Strategy (QNDS) 2011-16, to help implement these ambitious visions.

There are significant differences in relative spending levels between states, however, the data requires some interpretation in order to compare like-with-like. Although #Oman ranks first in terms of capital expenditure as a share of GDP (14.6 percent in 2012), this is largely because it includ investment in oil and gas within the budget. In other GCC states the accounts of the national oil companies, including their capital expenditures, are not consolidated into the overall budget. Nonoil capital expenditure in #Oman was still high, around 9.8 percent of GDP, equal with Saudi Arabia.


Conversely, the #UAE appears to rank at the bottom regionally, spending just 2.1 percent of GDP on budgeted development projects, according to the IMF's estimated consolidated federal accounts. However, this is likely to be an underestimate, as capital expenditure is dispersed widely across governmental and quasi-governmental agencies in the seven emirates. In reality, spending in the #UAE is likely to be closer to the regional average. Meanwhile, #Kuwait was a laggard, spending just 3.5 percent of GDP. This is because of repeated hurdles to the implementation of its 2010-14 Development Plan. However, capital expenditure in #Kuwait is likely to pick up as contracts have now been awarded for a number of significant megaprojects such as the Sheikh Jaber Bridge over #Kuwait Bay.

Qatar spent the second largest amount in 2012 (13.5 billion). This is because of both the major infrastructure projects underway in the run up to the 2022 World Cup and the significant investments in health and education to meet the human development goals of Qatar's National Vision 2030 and the QNDS 2011-16.

Looking ahead, QNB Group expects that government capital expenditure, both direct and through public-private partnerships, will remain high throughout the GCC over at least the next decade.

Common themes across the region include rail networks to relieve congestion in major cities and connect the Gulf's major coastal hubs. Also further expansions are planned in power and water desalination capacity plus social spending on schools, hospitals and housing. Many GCC countries have medium term spending plans running into hundreds of billions of dollars. For example, #SaudiArabia committed in 2011 to invest 67 billion on housing alone, to build half a million new homes. Meanwhile, Abu Dhabi has committed to 90 billion in capital expenditure between 2013-17.

 


Arab News




  MENA News Headlines
 Apr 24 2017 - Sisi receives warm welcome as he lands in SaudiMENAFN
(MENAFN) In a visit to bolster ties after months of tension, Egyptian President Abdel Fattah al-Sisi received a warm welcome from King Salman as he landed Sunday in the kingdom.State media said ...

 Apr 24 2017 - Bahrain-Dilmunia to develop USD137mn family-centric mallMENAFN
(MENAFN) Bahrain-based Dilmuina Mall Co. will develop a unique family-center mall over a 26.754 square meters in the heart of Dilmunia Island at a cost of USD137mn.Moreover, the mall will boast more ...

 Apr 24 2017 - Egypt-Talaat Mostafa purchases USD243.8mn landMENAFN
(MENAFN) Egypt's major listed real estate developer Talaat Mostafa has bought 500-feddan plot in its new administrative capital for USD243.7mn. The country aims to build a new city of 45 km east of ...

 Apr 24 2017 - Tunisia, Palestine ink mutual co-op agreementMENAFN
(MENAFN) The Tunisian and Palestinian posts signed a mutual co-op deal of a visit paid by Palestinian Telecom and Info Tech Minister to Tunisia.Moreover, this deal aims to foster tie between the ...

 Apr 23 2017 - Minister of Foreign Affairs Stresses Depth of Saudi-Egyptian Relations 2Saudi Press Agency
(MENAFN - Saudi Press Agency) Al-Jubeir stressed that the meeting dealt with the situations in the region, particularly in Syria, Yemen and Libya, and importance of finding solutions for these ...

 Apr 23 2017 - Qatari Foreign Minister Meets with His Kazakh CounterpartSaudi Press Agency
(MENAFN - Saudi Press Agency) Doha, Rajab 26, 1438, Apr 23, 2017, SPA -- Qatari Foreign Minister Sheikh Mohammed bin Abdurrahman Al Thani met here today with Kazakhstan's Foreign Minister Kairat ...

 Apr 23 2017 - Saudi- Palestinian Prime Minister receives Japanese OfficialSaudi Press Agency
(MENAFN - Saudi Press Agency) Ramallah, Rajab 26, 1438, April 23, 2017, SPA -- Palestinian Prime Minister Rami Al-Hamdallah met here today with Japanese Minister of State for Foreign Affairs Nobu ...

 Apr 23 2017 - Governor of Riyadh Region honors Ceremony of Sultanate of Brunei EmbassySaudi Press Agency
(MENAFN - Saudi Press Agency) Riyadh, Rajab 26, 1438, April 23, 2017, SPA -- Prince Faisal bin Bandar bin Abdulaziz, Governor of Riyadh region honored today the ceremony of the Embassy of Sultanate ...

 Apr 23 2017 - Palestinian Prime Minister receives Austrian ChancellorSaudi Press Agency
(MENAFN - Saudi Press Agency) Ramallah, Rajab 26, 1438, April 23, 2017, SPA -- Palestinian Prime Minister Rami Al-Hamdallah met here today with Austrian Chancellor Christian Kern. During the ...

 Apr 23 2017 - Governor of Riyadh region patronizes graduation ceremony of students of Imam UniversitySaudi Press Agency
(MENAFN - Saudi Press Agency) Riyadh, 26 Rajab 1438H corresponding to April 23, 2017 SPA -- Prince Faisal bin Bandar bin Abdulaziz, Governor of Riyadh Region, here on Sunday evening, patronized the ...

more...


 





Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Search News
Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help