We think that GDP growth in the Gulf Cooperation Council (GCC) countries could fall to around 3.8% in 2012, down from 7.2% last year (and lower than most analysts expect). Admittedly, healthy balance sheets will help the oil-rich governments to sustain public spending in the near term, thus maintaining decent growth rates. However, on the back of a slowdown in hydrocarbon production, problems in the euro-zone and the region’s own political troubles, last year’s performance is unlikely to be repeated.
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