The Gulf region posted a trade surplus of around $520bn last year which stands as the world’s biggest and almost twice that of nearest competitor China, a new research suggested.
The region boasts on its extensive hydrocarbon resources and generates a healthy trade surplus thanks to massive exports of oil and gas. Saudi Arabia, the biggest economy in the GCC region, accounts for nearly half of the $520bn cash trove.
according to analysis from lender QNB Group, KSA contributed a surplus of $245bn, while the UAE’s surplus amounted to US$94bn. Qatar posted a trade surplus of $79bn.
The current surplus is twice the size of the country with the next largest surplus, China, and is also about two-thirds the size of the US’s trade deficit.
However, QNB Group forecast suggests trade surplus is likely to decline to the tune of $493bn in 2012-13 due to imports growing at a rate of around 3.5%.
Japan and South Korea were named as the two countries doing bulk of trade with Gulf economies, the report noted.
According to IMF data, Tokyo, main trading partner of GCC for decades, purchased 16% of Gulf exports and supplied six% of imports in 2010 while South Korea stood as the next biggest with 10% exports and 4% imports.
The QNB Study noted that half of the GCC trade surplus in 2010 came as a result of trade with these two countries.
India also consolidated itself as GCC’s leading business partner, racking up 11% of total trade in 2011 from a mere 2% ten years ago.
“India was both the fastest growing import source and export destination for the GCC in 2006-10, with annual growth of 27 percent and 55 percent respectively,” the study found.
Similarly, Chinese trade has risen from four percent of total trade in 2001 to ten percent in 2010.
The study forecasted that changes most likely will occur in Japan’s trade flows compared to 2010 with the world’s third largest economy’s share of exports from the GCC rising even further, as it imports more hydrocarbons to bridge the energy gap created as a result of the closure of nuclear power stations.