UAE among world’s 25 rapid growth markets

DUBAI - The UAE and three Arab countries rank among the world’s 25 Rapid Growth Markets, or RGMs, that are poised to achieve an average of 6.2 per cent growth in 2011, and to eventually account for 50 per cent of global gross domestic product, or GDP, in nine years, a leading global business consultancy company said.

The UAE is ranked second after Qatar as the country with the highest nominal GDP per capita measured at purchasing power parity, or PPP, in 2010 among the 25 RGMs, said Ernst & Young’s quarterly Rapid Growth Markets Forecast.

Qatar has also been the fastest growing economy over the last decade, with an average growth of 13 per cent, it said. Egypt’s average growth was at 4.9 per cent, the UAE at 4.3 per cent and Saudi Arabia achieved almost 3.2 per cent growth.

The 25 RGMs will account for 38 per cent of world consumer spending and 55 per cent of world fixed capital investment, according to the forecast. By 2020, rapid growth markets will account for 50 per cent of global GDP when measured at purchasing power parity.

According to Ernst & Young’s  report, the 25 RGMs have grown on average by 5.8 per cent per year over the last decade, more than three times as fast as the advanced economies combined and this rapid pace of expansion is set to continue, with growth in RGMs outpacing the advanced economies by more than 3.5 per cent per annum over the next decade.

“The dynamics of the global economy have changed with a new set of fast-growing markets challenging the position of the established advanced economies. The RGMs are expected to grow collectively by 6.2 per cent this year, almost four times more than the anemic growth expected in the eurozone,” said the report.

In 2012 the RGMs are expected to grow by 5.9 per cent, compared with 1.6 per cent growth for the eurozone this year falling to 0.6 per cent next year.

This forecast, which is co-produced with Oxford Economics and based on the Oxford Economics’ Global Econometric Model, offers insight on macroeconomic trends across 25 RGMs which have been selected based on the size of the economy and population, strategic importance for business and proven strong growth and future potential.

Bassam Hage, Mena markets leader, Ernst & Young, said rapid growth markets are becoming increasingly important in terms of both their overall weight in the world economy and their global influence. “While the advanced economies struggle with weak growth, RGMs seem well-placed to better weather the economic storm.”

The forecast shows average GDP growth in the RGMs edging just under six per cent in 2012, with the American and Asian countries seeing the most marked slowing in growth. The outlook in the Middle East, however, is more positive with resource-rich countries such as Qatar, Saudi Arabia and the UAE benefiting from high oil prices.

“With the exception of Egypt’s slow recovering economy which is being weighed down by local developments, Qatar, Saudi Arabia and the UAE are expected to see continued strong growth in the future,” said Bassam.