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Survey of Economic and Social Developments in the Arab Region 2014-2015

image of Survey of Economic and Social Developments in the Arab Region 2014-2015
In addition to conflicts and related security disruptions in the Arab region, a significant fall in oil prices and their uncertain prospects have become a predominant economic concern, with prices plunging by more than 50 per cent in the second half of 2014. Nevertheless, member countries of the Gulf Cooperation Council (GCC) have continued to lead growth in the Arab region. This edition of the Survey of Economic and Social Developments in the Arab Region looks at the continued expansion of the non-oil sector as it maintains GCC economic growth. Lower oil prices have not yet negatively affected the GCC economically, although confidence has dropped with weakening stock markets and real estate transactions. Furthermore, lower oil prices have benefited oil-importing Arab countries by easing their balance-of-payment and fiscal constraints. With conflict and violence in the region, one of the main channels for economic stabilization has been intraregional flows of capital and remittances from the GCC countries.

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Socioeconomic trends and developments in the Arab region

The average real GDP growth in the Arab region was an estimated 1.5 per cent in 2014, unchanged from 2013 (table 5). A major fluctuating factor are negative growth estimations for Iraq, Libya and Syria. Despite falling oil prices in the second half of 2014, GCC countries have remained the growth centre of the Arab region. The active non-oil sector in GCC countries has outpaced the decelerating oil sector. The value of financial and real estate assets has shown a positive growth in GCC countries, although the speed of growth stalled in the second half of 2014. However, the recent trend of polarized economic performances between GCC countries and other Arab countries has ended owing to lower oil prices, which have benefited oil-importing Arab countries by easing their balance-of-payment and fiscal constraints.

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