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Growth will continue - IEA

GCC countries are expected to earn US$4.7 trillion in oil exports by 2020 going by the Opec targeted floor price of US$50 per barrel, a recent report by Ernst & Young says. This will be 2.5 times their [GCC countries] oil earnings over the last 14 years. Middle East economies are predicted to be a real growth story for the next few years,

even as the region has not been immune to the effects of the global downturn,' the report said. “Regional economies are well-placed to capitalise on opportunities emerging from the crisis, despite the fact that there are some concerns over issues related to the tightening of the credit markets and softening of property prices,” Phil Gandier, head of Transactions Advisory Services at Ernst & Young Middle East, was quoted as saying in the report.

“These increased earnings will allow GCC economies to buy additional assets globally or finance local infrastructure developments as many other economies stall. Their relatively moderate regulation and tax regimes will be even bigger attractions as European and US business environments tighten under the pressure of the ongoing global recession," he added. Oil market analysts broadly agree with Ernst & Young's findings. "Once the global economies are on the path to recovery, oil prices will rebound.

I think, it would take about two years for that to happen," Dalton Garis, associate professor of Economics and Petroleum Market Behaviour at the Petroleum Institute in Abu Dhabi told Gulf News. Garis said he expects international oil prices to increase to around US$60 a barrel by December.