A UN report on world economic prospects for 2014 released on Wednesday indicated that member states of the Gulf Cooperation Council (GCC) have been on a stable growth path despite weak oil prices and exports.
According to the report 'UN World Economic Situation and Prospects 2014 mid-year update,' "large surpluses relative to Gross Domestic Product (GDP) are still present in oil-exporting countries, at about 16 percent in Saudi Arabia, and at even higher levels in some of the other oil-exporting countries." In western Asia, the report said, internal instability and lower oil exports continue to shape the economic picture, adding that economic activity is still relatively weak in comparison with pre-crisis trend, with growth forecast to reach 3.6 percent this year after 3.8 percent in 2013, before accelerating to 4.4 percent in 2015.
The report predicted that the global economy is expected to strengthen over the next two years, despite a downgrade of growth prospects for some developing economies and economies in transition.
Growth of world gross product is now projected at 2.8 percent in 2014 and 3.2 percent in 2015, up from 2.2 percent in 2013, the report noted.
While the United States remained the largest deficit economy, its external deficit is expected to be about 2.2 percent of GDP in 2014, down significantly from the peak of six percent registered in 2006.
On the other hand, the report noted that the collective external surplus of China, Japan and a group of fuel-exporting countries has narrowed accordingly.
China, for instance, is expected to register a surplus of just above two percent in 2014, a sharp decline from a high of 10 percent in 2007 and Japan's surplus is expected to drop to less than one percent.
In contrast, the surplus of the euro area as a whole has increased to about 2.9 percent, with Germany running a surplus of seven percent.
This pace of expansion, the report cautioned, is still low compared to the growth path before the 2008 global financial crisis.
"More than five years after the financial crisis, the world continues to struggle with getting the global economic engine back to running at full capacity. Compared to pre-crisis trends, we have not sufficiently boosted output, trade and employment to their potential levels," Pingfan Hong, Chief of the Global Economic Monitoring Unit of the UN Department of Economic and Social Affairs said in a statement.
The report's downward revision in growth projections mainly reflects deteriorating situations in several emerging economies due to different challenging economic and political conditions.
The report warned that risks and uncertainties for the world economy include: international spillovers from ongoing adjustment in monetary policies by developed economies; vulnerabilities of emerging economies; remaining fragilities in the euro area; long-term unsustainable public finance for many developed countries; and geopolitical tensions.
It indicated that developed countries will continue to recover, as their growth is projected at 2 percent in 2014 and 2.4 percent in 2015.
"For the first time since 2011, the developed economies of North America, Europe and Asia are all aligned towards positive economic growth over the next two years, which should form a positive cycle to reinforce further recovery," the report said, adding, however, that five years after the global financial crisis, projected growth rates remain too weak to recover the output and jobs lost in most of those economies.
With new projected growth rates of 4.7 percent and 5.1 percent for 2014 and 2015 respectively, developing countries, as a group. will keep contributing to a large proportion of global growth, the report said, adding, however, that this path is 2 percent lower than pre-crisis levels for developing countries.
The report said the world trade growth was flat in the first quarter of 2014. However, some improvements is expected for remainder of 2014 as import demand in major developed countries gradually increases.
It added that real exports are forecast to grow by 4.1 percent in 2014, almost twice as fast as in 2013, but still below the pre-crisis trend of twice the global output growth.