Bahrain’s  rating upgraded
The Bahrain Monetary Agency (BMA) has announced that international rating agency, FitchRatings, has upgraded Bahrain’s credit outlook to positive, from stable.

FitchRatings also affirmed Bahrain’s sovereign long-term foreign currency debt rating of A- (A minus) and the long-term local currency debt rating of A.
The improved outlook for Bahrain reflects the kingdom’s continued strong economic growth based on the Government’s prudent yet progressive handling of economic, fiscal and political reforms. Earlier, in April 2006, Standard & Poor’s (S&P) upgraded Bahrain’s foreign currency debt rating to A, from A-, with the outlook as stable.
In a statement, FitchRatings says “the rating and outlook are supported by high per capita income, an overall net external creditor position, and a diversified economy.”
Real GDP growth, which is expected to have reached 7 per cent in 2005, is expected to average 6.7 per cent in 2006-07, led by the non-oil sector and, in particular, the financial sector.
“There is a firm pipeline of investment projects spanning infrastructure, tourism, oil refining and energy-intensive industries, with increasing private sector participation,” said the FitchRatings statement.
“High oil export receipts have swelled surpluses on the public finances and on the current account of the balance of payments.
“The general government surplus is conservatively forecast to reach 5 per cent of GDP in 2006. Capital project spending has been increased but the government retains fiscal flexibility and has maintained a prudent stance. The current account surplus will top 12 per cent of GDP.”
FitchRatings said Bahrain’s strengths include high per capita income and economic diversification; low and falling public debt; sovereign and overall net external creditor; high-quality financial sector regulation; and public sector and labour market reforms.

Saudi mega projects
Saudi Arabia is embarking on a number of new mega projects in a wide range of industries, focusing mainly on the oil and petrochemical industries.
According to Samba Financial Group’s mid-year report about the Saudi economy, the total cost of projects currently underway or in advanced planning for execution over the next several years is about SR1.06 trillion ($283 billion).
The oil and gas industry alone is undertaking about SR259 billion or one fourth of the total.
Defence and security purchase projects total SR183 billion, accounting for 17 per cent of the total.
Large real estate developments capture about SR150 billion, or 14 per cent of the total investments, followed by mining and minerals development with SR44.63 billion of the total.
Other small projects include public utility projects such as electricity, water and transportation.

Abu Dhabi GDP soars
The Abu Dhabi Chamber of Commerce and Industry (ADCCI) has announced that the emirate’s gross domestic product (GDP) surged to Dh301.7 billion ($82.14 billion) in 2005 from Dh218.4 billion in 2004.
The GDP is projected to reach Dh341 billion this year on the back of a robust non-oil sector.
“Abu Dhabi has had a steady growth of GDP for the last several years. It stood at Dh218.4 billion in 2004, Dh301.7 billion in 2005 and is projected to increase to Dh341 billion in 2006,” says chairman Salah Salem bin Omeir Al Shamsi.
The contribution of the non-oil sector in the GDP was Dh105.6 billion in 2004, Dh122.3 billion in 2005 and is projected to rise to Dh139.4 billion in 2006, the report said. The ADCCI had 75,234 members at the end of June, of which 4,461 were new companies. Of these new firms, 41 are in the industrial sector.

Remittances total $27bn
Foreign workers in the Gulf send home nearly nine per cent of the Gulf states’ GDP each year.
These remittances add up to $27 billion each year, according to a report by the Gulf Research Centre (GRC), a think tank based in Dubai.
Since 1975, the remittances made by expatriates total $520 billion.
Foreign workers number around 13 million in the Gulf and account for 70 per cent of the workforce. The UAE remains the most dependent on foreign workers. Expatriates comprise 88 per cent of its workforce, compared with 83 per cent in Qatar, 81 per cent in Kuwait, 72 per cent in Saudi Arabia, 55 per cent in Bahrain and 54 per cent in Oman, it said.
The largest expatriate communities in the Gulf are from India, Pakistan, Egypt, Yemen and Bangladesh. Using data from the Arab Monetary Fund and other sources. GRC found that India and Pakistan together received about $60 billion in remittances between 1993 and 2002. Indians alone send home $5 billion per year. The lion’s share of the transfers originate from Saudi Arabia, which accounts for 63 per cent of all remittances, followed by the UAE at 15 per cent.

GCC reserves surge
A sharp increase in oil prices in the past five years has boosted the reserves of the six Gulf Cooperation Council (GCC) member states by nearly Dh257.5 billion ($70 billion).
The latest World Bank data shows that the reserves of the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman have reached the highest level of $145.1 billion at the end of 2005 compared with $75.1 billion at the end of 2000.
The bulk of the reserves are controlled by the UAE and Saudi Arabia while the remaining members also reported large increases in reserves.
From nearly $14.5 billion at the end of 2000, the UAE’s cash reserves soared to a record $23 billion at the end of 2005. In Saudi Arabia, the reserves jumped from $46.2 billion to $101.1 billion during the same period.
The reserves grew from $8.8 billion to $9.5 billion in Kuwait; $1.3 billion to $4.9 billion in Qatar; about $2.7 billion to $4.1 billion in Oman and $1.6 billion to about $1.7 billion in Bahrain.